In Germany, appropriateness of remuneration systems and payments is not only a requirement under cross-industry regulations such as the Stock Corporation Act (AktG) and the Corporate Governance Code (DCGK), but is also one of the fundamental principles of pay-related regulation of financial sector companies.
The German Banking Act (KWG) and industry-specific remuneration regulations, for example, define specific requirements for institutions with regard to performance measurement, payment models and the remuneration structure elements such as the ratio of basic to variable pay. Other types of business, such as insurance companies or asset managers, are also subject to specific regulatory requirements they must comply with.
This not only places special responsibilities on the supervisory bodies of financial services organizations in terms of appropriateness of the pay for chief executives and management boards, but also challenges them to design competitive remuneration systems.
hkp/// group experts are available to evaluate the appropriateness of remuneration schemes on behalf of supervisory bodies. Their reports will pay particular attention to suitable external comparison groups and consider aspects such as industry, country, company size and business model. They will also look at internal vertical appropriateness (i.e. evaluating the pay gap between management board and senior management and/or between management board and other employee levels). The evaluation is based on regular surveys and market analyses, on the basis of which the latest standard market pay levels are determined.
Our consultants can also look at any current regulatory issues or review the structure of the management board remuneration system. In addition, hkp/// experts can also provide information on recent developments in the market, point out alternatives and explain any consequences. The focus is always on the overall picture to make sure that there is a positive relation between the control systems at the corporate level, pay and career development.
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