For businesses to survive in a recession, and position themselves competitively for the eventual upturn, they need to ensure that their most capable leaders remain in place and highly motivated. Setting senior executives’ remuneration packages correctly in the market is arguably as important now as it is during periods of economic growth.
Spindler’s Remuneration Research service, led by Nigel Bates, exists to help clients take decisions based on real market information and thereby reduce the risk of key talent being tempted by other companies. It is tailored to the precise accountabilities of each individual director or manager and targeted on direct competitors.
We employ direct research methodologies, similar to those used for senior executive search assignments, in order to obtain concrete evidence upon which conclusions can be based. As this calls for the cooperation of competitors, we offer to feed back results to all participants, with identities concealed to ensure confidentiality.
We interview each of the nominated directors/managers within the client company, to discuss their position and accountabilities in detail and to obtain their views on the most relevant target groups of organisations for their specific role. From desk and telephone research, we then construct a list of at least ten named individuals to be approached for each position. In our experience, the range of competitor organisations can vary considerably from function to function within one client.
We conduct a telephone exercise, attempting to make direct contact with each of the individuals named in the target list. Recognising that only some of the individuals contacted will be prepared to provide information, we continue to make calls until we have obtained at least five relevant data-points per position. This sometimes necessitates revisiting and extending the initial list of target organisations.
To supplement the telephone research programme, we additionally seek relevant information that is available in the public domain, and where appropriate integrate it into the data.
We collate all the obtained data on target individuals’ total cash remuneration, combining basic salary and a best estimate of actual bonus received. We then make adjustments to allow for the target individuals’ differing pension arrangements and other significant fringe benefits, such as company cars. The resulting compensation values are then ranked and plotted, and from this information conclusions are drawn and recommendations are made.
“When an economic recovery comes, you can bet that the more competitive businesses are likely to be bullish in attracting people who can help give them the edge. It is vital not to be caught out by having senior remuneration levels that have drifted away from the market,“ says Nigel.
