Pensions rise in proportion of salaries, says Deloitte
Pensions can be worth anywhere between 20% and 70% of salary for finance executives across FTSE 350 companies, according to a report by Deloitte.
Deloitte's research into trends in executive pension practice in FTSE 350 companies finds that traditionally pensions have been the missing link in executive remuneration. Difficult to analyse and compare, pensions have never really been considered an integral ?part of the package'.
Commenting on the issue, Bill Cohen, executive remuneration partner at Deloitte says: ?Since the mid 90s there has been much talk about taking a new approach to executive remuneration, which in reality has often included everything but pensions, thereby leaving out a significant element of remuneration. Given the substantial values involved, increased interest from shareholders and the impact of the new pension legislation, this omission cannot continue.?
?A good remuneration policy should balance salary, pension and performance linked awards in a way which supports the business strategy and culture of the company. For example it may be appropriate for a company to pay lower salaries but have more generous pension arrangements. Or they might have less generous pensions but make higher potential awards linked to performance from which, if company performance is good, an individual can fund his or her own retirement,? says Cohen.