We are seeing a move from ‘shareholderism’ to ‘stakeholderism’. In other words, capitalism is giving way to prioritising the protection and quality of life. Governance has been catapulted into the limelight under the banner of ESG (environment, social and governance) with a fresh look at ESG measures that address the ‘reset’ that society is demanding.
These circumstances have resulted in seven top remuneration committee and executive remuneration trends around the world, both in developed and in developing economies:
Remuneration committees’ mandates have been challenged by the wider stakeholder – and internally – to become more inclusive and extend their reach. Remuneration committee charters are extending their original mandates from all aspects of executive compensation, disclosure and shareholder engagement to include:
The wage gap or pay ratio (measures of pay between the CEO or top earners and the bottom or median earners) has become a growing issue worldwide. And it is being remedied in a few ways:
Remuneration committees are widely adopting strategies that address the growing wage gap to reduce it over time. In a recent Just Capital survey, the top 100 USA companies surveyed have increased their median pay by 18%. Change is definitely in the works. The face of remuneration following the pandemic will probably never be the same again.