01 December 2014
Executive leadership is dedicated to foster an action-oriented culture aimed at delivering results. Therefore emphasizes should be placed on variable pay and long-term value creation in order to create and maintain a strong alignment with a company’s annual financial performance goals and long-term value creation strategy.
In designing an executive pay, emphasize is on variable pay and long-term value creation strategy. Executive remuneration mix consists of three (3) main elements as indicated below:
1. Paying competitively: This is achieved through benchmark against a peer group consisting of companies with whom a company competes for talent.
2. Differentiating by experience and responsibility: This is achieved through alignment of the pay with the responsibilities, relevant experience, required competence and performance of individual jobholders.
3. Pay-for-performance: Target pay aims at 40% of base pay and 60% in variable pay in order to maintain a strong alignment with a company’s annual financial performance goals and long-term value creation strategy.
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