Today – at the World Economic Forum in Davos – Dutch knowledge institute Reward Value launched its Guidebook Responsible Remuneration. The Guidebook is designed to support companies to establish responsible remuneration practices and for investors and other stakeholders to assess whether the company is operating a responsible remuneration policy. Remuneration is an important steering instrument in ensuring executive behaviour towards sustainable long-term value creation. Over the past five years, Reward Value has done extensive research on modernising executive pay. With the guidebook, the organisation has turned its findings into a pragmatic and hands-on instrument that can help companies develop a responsible remuneration policy.
The guidebook – which Reward Value launched in collaboration with InTent, is designed for practitioners in the field of executive remuneration either at companies, shareholders, or stakeholders. As each company is different no one-size-fits-all approach is possible. The guidebook is based on Reward Value’s Principles of Responsible Remuneration (PRR), that were launched in collaboration with UN Global Compact and InTent at last year’s World Economic Forum.
Frederic Barge, founder of Reward Value: “Too often, executive pay remains linked to short-term financial success. Therefore, it is not aligned to the ambitious purpose statements installed by the private sector. Changing executive pay is a key contributor to the needed transition towards regenerative and inclusive economies on a healthy planet. In addition, every year when listed companies publish their annual report, journalists check out the remuneration report first to see what the pay-out to executives has been. It has made executive remuneration the Achilles heel of many corporations and for many more, also a reputational risk. The Guidebook offers the long-awaited answer to the question of how to modernise executive remuneration. With our pragmatic and accessible approach, every company can now formulate a responsible remuneration policy and execute it. Furthermore, shareholders and other stakeholders can assess a proposed remuneration policy and the proposed pay-outs following the execution of the policy.”
About Reward Value
Reward Value is a knowledge institute, sharing remuneration expertise with consultants, shareholders, universities and board members, through education, research, workshops, training and advice. Executive remuneration not only has a proven impact on the behaviour of executives, it is also a clear demonstration of a company’s commitment towards its stated purpose. It is Reward Value’s firm belief that achieving outcomes that benefit both shareholders and society requires behavioural change at companies, starting at the board level. Executives are critical to a firm’s success and can drive the required change to achieve better social and environment outcomes conjunctively with financial performance. Stimulating executive behaviour towards sustainable entrepreneurship can be encouraged by aligning the executive remuneration policies to the long-term impact of firms on financial, environmental, and societal value creation.