Companies often come to us wondering whether their senior executives’ remuneration packages are in line with those offered by other organisations of similar size, particularly when recruiting for international roles. Few employers routinely have access to this information, and gaining it can be challenging.
Newman Stewart has access to a wide range of market information across many specialist sectors which enable us to provide an up-to-date, comprehensive benchmarking service to ensure that your business remains desirable compared to the opposition when it comes to attracting and retaining talent. We have recently undertaken several projects for our clients including research benchmarking for Managing Director packages in Singapore within the bulk materials handling sector.
Why is it so important for companies to know this?
Offering a competitive remuneration package is important if company's don’t want to risk losing their top executives to offers of better pay packages from competitors. It is also important to be able to prove to shareholders in black and white that senior staff provide value for money. With variations in pay potentially being the difference between retaining or losing highly valued directors and keeping shareholders happy, salary benchmarking can be vitally important to the success of an organisation.
Where to start when benchmarking?
Listed businesses have remuneration committees in place for exactly this purpose but, without any guidance of the compensation packages offered by other organisations, it can be difficult to know where to start. Salary surveys can be useful for benchmarking at more junior levels, particularly with the significant volume of data that can be generated when comparing pay for roles that are relatively common in the marketplace. However, at the most senior level – where there are simply fewer roles to compare and we typically see a huge variation in the make-up of compensation and benefits packages – these are not as useful.
Salary benchmarking is a much more focused and detailed process than a traditional salary survey. Benchmarking gives a complete breakdown of the compensation package allowing companies to compare salary and benefits available within specific sectors and named companies.
How is it possible to get this information?
For listed businesses, the majority of it is available publicly within annual company reports, but this requires resource to analyse large volumes of data. Enlisting a third party, such as Newman Stewart to carry out this work, can save a lot of time and effort, and ensures completely reliable and accurate results backed up by in-depth telephone research.
With variations in pay potentially being the difference between retaining or losing highly valued directors and keeping shareholders happy, salary benchmarking can be vitally important to the success of an organisation.
What information does salary benchmarking allow businesses to obtain?
Typically, it will provide a list by company size, sector and revenue which details the package earned in terms of the value of the basic salary, cash bonus, share bonus, long term incentive plan (LTIPs) and pension of the position in question (be it CEO, COO, CFO or FD).