10 ‘must-sees’ in executive remuneration reporting

Reporting on executive remuneration is proof of transparency and a key characteristic of good governance. Moreover, proxy advisors, and shareholders in general, strongly rely on the remuneration report for assessing the link between pay and performance, and in order to find out to what extent the executive remuneration policies also put the focus on sustainability and ESG performance. We also see an evolution towards broadening the scope of the remuneration report by providing information on the overall remuneration policy applied by the firm to all its employees. In some companies, the remuneration report also provides information on the topic of equal pay.

Taking all this into account, it will be no surprise that firms are eager to learn from each other and to be informed about the latest evolutions and trends in executive remuneration reporting. Consequently, and as a follow-up to a previous white paper, ‘Executive Remuneration Reporting in Europe’, the Executive Remuneration Research Centre has selected 10 interesting practices related to the disclosure on executive rewards. In order to do this, we have focused on UK firms’ remuneration reports, as experience has taught us that the UK is a frontrunner in the field of executive reward disclosure.

1. High-level company performance overview
2. Overview of the remuneration policy and its relationship to strategy
3. Brief overview of granted remuneration
4. (Ex-ante) information on KPIs driving incentives and strategic logic
5. (Ex post) information on realised performance and impact on incentives
6. Required shareholdings
7. Remuneration Committee activities during the financial year
8. Stakeholder engagement in executive remuneration
9. Compliance with applicable corporate governance code
10. Company-wide remuneration Framework