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Are senior executives feeling the pain?

As company profits dip, jobs are cut and pay is slashed – are boards suffering enough?

Source | www.hcamag.com |

With the COVID-19 crisis continuing to impact businesses across Australia, the country’s sovereign wealth fund is urging the hardest-hit companies to listen closely to public opinion when setting executive pay, particularly cash bonuses.

As companies employ cost-containment strategies – from pay cuts to workforce reductions – to weather the crisis, Australia’s $162bn Future Fund advised organisations to exercise discretion in deciding on remuneration packages.

“Boards should not strip out the COVID-19 impact when assessing performance or apply ‘creative accounting’ to adjust for the impact of COVID-19,” the board at the sovereign wealth fund said.

Leaders at the fund also pointed out how shareholders typically monitor executive pay decisions to ensure “outcomes accurately reflect performance” as well as broader executive targets.

Legitimate decisions to cut jobs or pay during this critical time need not be explicitly factored into executive pay outcomes, the board said.

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Source
www.hcamag.com
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