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Reward and Remuneration

Our reward and remuneration solutions include the planning, implementing and modelling of all aspects of reward, including base pay, bonus arrangements, equity management (long term incentive plans and share option plans) and other benefits / perks.

The following gives a short summary of some of the different functions our clients are using, but each only provides a foundation. We need to work closely with you and your team to tailor each module to the specifics of your award programmes and processes; it is important for us to understand how information flows and is communicated from one area to another so that true value can be leveraged from your data. This partnership must continue post-implementation to ensure the solution evolves as your organisation and remuneration processes change.

Core Functionality:

Personal Data – personal information about the executive with the ability to hold remuneration specific information such as award target percentages, ownership guideline amounts etc.

Audit – full audit trails are enabled, holding information before and after a change along with the source and user initiating the change. In addition user activity within the solution is tracked and available to administrators.

Permissions – a read / write control system allows for flexible system usage from 1 or 2 users through to large and different user groups with varying permission levels, such as allowing access for operating company representatives of subsidiaries.

Security – with a foundation created from a combination of our FTSE 100 clients’ rigorous security protocols and constant updates to keep security up-to-date your information will be secure and protected.

Integration – standard integration with existing organisational information is provided, such as to existing share price and foreign exchange rate feeds.

Reporting – we find that reporting needs are just as organisational specific as process requirements. Client reports created in the past have ranged from Total Remuneration Statements (as snapshots, date specific or dynamic), Director Reporting inline with the ever changing governance, and Award Certificates to Forecasting Reporting and Benchmarking Analysis. Ultimately the system is there to provide efficient, accurate and useful outputs, and this is one of the critical areas to understand when assessing the type of solution required.

Optional Modules:

Salary – current and historical salaries have always been important to record, but our clients asked us to extend this to include a full salary proposal approval process allowing all salary activity to be undertaken within the system, along with introducing benchmarking data to use in comparisons between job roles. This can include market pay data, pay modelling, pay grade structures and pay progression.

Pensions & Executive Benefits – pension and benefit remuneration is very specific to each organisation, and we found that maximum flexibility was required within this module – almost a client by client basis.

Cash Awards – provides both an annual bonus arrangement nomination to approval processes as well as the ability to record other cash awards (like spot bonuses or client wins) that are not part of an annual award programme.

Long Term Incentive Share Awards – one of the most used modules by our clients, this includes a flexible full LTI nomination to grant to vest process starting from either a value or an amount of stock while handling executive election choices and the associated share dealing activity.

Stock Option Awards – historically clients opted for a robust option module catering for the full nomination, granting and exercising of options. In today’s environment, where there is less reliance on options as an award programme, we see more focus on the recording of historical option awards, and the exercise process including executive election choices. However, it does still retain the facility to grant option awards should this be required.

Share Ownership Data – allowing for privately held shares to be recorded and the impact to the executive’s ownership goals calculated.

Co-Investment Funding – when co-investment awards form part of an organisation’s remuneration, then this module is used to record the requirements and how the co-investment is being funded by the executive.

Performance – many award payouts are driven by performance targets, such as Total Shareholder Return, Earnings Per Share, Earnings Before Interest and Tax through or Free Cash Flow. This module enables the management of tailored targets and the impact of performance on payout within the award modules.

Lapsing – the solution allows for the lapsing / forfeiture of share awards either individually or in bulk.

Dividends – the solution has the facility to record dividends paid and the resultant impact on what vests; whether the dividend is paid as a cash alternative or in shares.

Executive Engagement – the solution has an optional executive engagement and communication module. This dynamic and captivating module is designed to aid our clients when communicating reward to their executives. It helps to demonstrate how a company’s remuneration policy is linked to the success of the business through the balance of short and long term incentives via fixed and variable pay components. It also helps to communicate how our clients’ total remuneration policy is competitive in the global talent market.

Optional Analysis Tools:

Benchmarking Analysis Tool – an extended benchmarking tool developed with clients to analyse and model different information against individuals or groups of executives to help ascertain current and proposed remuneration.

Advanced Data Analysis Tool – a fairly new innovation created in conjunction with a client that enables analysis at any time by creating custom reports through an easy to use, yet extremely robust, report creation system.

Modelling and Forecasting – within each separate area or combining multiple areas together, our modelling and forecasting capabitilites enable in depth analysis and scenario planning.

Whilst some data and functionality may well be dependent on others, our systems are always designed to be as flexible as possible. This means as well as the client being in control of what data fields they include in the system (with the ability to change this at a future date), the client is also able to “pick and choose” the functionality that gets included.

To find out more about how HWC can help you contact us at getintouch@hwcltd.co.uk.