Borderless Releases Survey Results on the Evolving Landscape of Executive Compensation

Has the financial crisis led to new reporting standards in terms of CSR and long-termism in corporate compensation?

Brussels, June 14, 2013. Borderless, an international provider of executive search and leadership services, has released the results of its latest survey: The Evolving Landscape of Executive Compensation. The study aimed to reveal the extent to which organizations across a variety of sectors are transforming financial packages and benefits to support today’s expectations of corporate leaders.

The Borderless Researchsmstudy, led by the firm’s consultant Jasmine De Clerck, in collaboration with Dr. Gijs van Bussel, Professor at Nyenrode Business University and Partner in PWC’s Human Resources Services practice in the Netherlands, surveyed more than 100 senior executives in headquarters primarily across Europe (62%) and US (30%). Industry sectors included Process & Converting, Food Processing, Environmental Technologies, and Life Sciences.

Key findings include:

• Short termism in compensation target setting seems to be the prevailing view.
• Corporate Social Responsibility inextricably bound up with compensation was found in only a minority of the surveyed companies. C-level Executives do not “walk the talk” on this important topic, i.e. there is clear talk about the issue, but actions are not clearly disclosed.
• The international movement from “transparency to relevancy” in disclosures (e.g. annual or compensation reports) has not taken off in the responding companies (of which 75% were privately owned).

“Despite years of talk about planet, people, and profit, and the desire to consider the long-term sustainability of companies, it seems we still haven’t managed to align compensation structures to match this ideal,” said Borderless Consultant Jasmine De Clerck.

With regards to whether or not the C-level executives are “walking the talk” by linking compensation to sustainable performance, Borderless researchers noted that close to one-third of all respondents state that the compensation packages of board members and the executive committee are clearly communicated in the annual report; however, half of the respondents state that this is not the case, and 17% do not know.

Despite the current international trend to move from transparency to relevancy, results showed that companies, especially those which are privately owned, lacked transparency and understanding with regards to Pay for Performance.

“It is not good enough to give all your data. You need to ask yourself the question: what is relevant? Do we actually pay for performance or retention?” said Dr. van Bussel. “Academic studies prove that you get into problems when the gap between compensation practices at the top and across the organization gets too big.”

“Although each annual report today talks about the effect of the company’s activities on the environment and its key stakeholders, there is no clear link to the CEO’s remuneration in these domains,” De Clerck added. “We believe that in the same way that several internal control scandals provoked new Codes for Corporate Governance, the financial crisis will lead to new reporting standards. This new way of reporting will decide in which companies investors and top talent are willing to invest their (leadership) capital... for the long term”

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For more information or for the survey results report, contact Taunya Renson-Martin at taunya.renson@borderless.net or tel: +32 475 604 096.

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About Borderless:

Borderless has a unique approach to international executive search. The firm finds and attracts talented senior-level executives for multinational companies in the Process and Converting, Life Sciences, Environmental Technologies and Food Processing sectors. For more than a decade, Borderless has been identifying leaders to assume roles on Boards and in senior management, finance, human resources, administration, marketing and sales, operations, logistics and R&D, as well as a range of specialist positions. http://borderless.net

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