FSA guidelines on high earner reward
Commenting on the FSA’s new draft Code of Practice on executive
remuneration in financial services, Charles Cotton, Reward Adviser at the
Chartered Institute of Personnel and Development (CIPD), welcomes the new
guidelines, but warns that all the elements of the reward package need to be
addressed for real progress to occur.
“Further work is required to give meaning
to these principles, as well as attention to other aspects of the reward
package that have not been addressed by the code. The severance package,
including pension arrangements, might have contributed to excessive risk taking
in the City, not just the ‘extravagant or excessive incentives structures’ as
highlighted by the code. “The CIPD is currently developing a more comprehensive
‘good practice’ guide on executive remuneration, which will address all
elements of the total reward package.
Our principles are being created by
reward practitioners for reward practitioners. They will reflect the challenges
and ambiguities faced by those creating competitive packages, not just for the
financial sector but for all sectors. The principles are aimed at those
involved in designing and implementing executive remuneration packages in
various settings.”
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