Within this report we have aimed to compare and contrast the remuneration plans and sustainability reporting between three companies, CRH, Kingspan and Marshalls. In doing this we aim to devise an appropriate remuneration plan and suggest sustainability reporting practices for Carminho Building Products considering Watts and Zimmermans Positive Accounting Theory and in line with the cultural and financial reporting context of UK.
2.0 Remuneration Comparison
We aim to compare and contrast both the similarities and differences amongst three chosen companies remuneration plans, CRH, Kingspan and Marshalls. Below we have selected numerous sections of the companies remuneration plans in which to examine closely.
2.2 Primary Objective
Each company examined, CRH, Kingspan and Marshalls hold similar objectives for implementing their remuneration policy. These objectives are implemented to achieve performance and motivation amongst the executives, whilst aligning with shareholders objectives.
2.3 Setting Remuneration Levels
In setting remuneration levels all companies acknowledge similar companies in size and scope as well as considering market rates. However each company has very individual methods in issuing bonuses and other schemes which we cover in further detail in the following sections.
2.4 Performance Related Bonus
Again, each company has implemented a performance related bonus. This is done to drive and reward executives to meet targets both on an individual level and a group level. Each company has different schemes outlines below.
CRH - Performance Related Incentive Plan
This plan implemented by CRH considers both financial achievements as well as personal goals. Financial is based upon 80% and the remaining 20% on personal. Also included is a long-term share price element, which entails deferred payments up to three years and payable in CRH shares. This is in line with shareholder objectives. CRH also offer share plan
Kingspan – Performance Related Bonus
Kingspan pay executives a bonus on exceeding targets that are set by the remuneration committee at the beginning of the year. These targets are all financial targets and executives may receive up to 100% of their base salary in bonuses.
Marshalls – Practice Incentives Program
Marshalls devise their plan based 67% on earnings per share and 33% Cash. Within each aspect considers many defining factors which are set through the committee. Additionally customer service must be 95% and health and safety reduction of 10%.
In addition to the base salary received and performance related benefits all companies we examined offered executives use of a company car as well as health/medical insurance. These benefits are in line with typical market practice and assist in attracting and retaining staff with the knowledge and experience the company requires.
2.6 Pension Scheme
Again, all companies have their own variances on pension schemes. These are encouraged to enable executives to make appropriate provisions for their retirement.
Two thirds of career average salary at retirement for full service
Calculated on individuals base salary and consider age, length of service and years until retirement.
30% of base salary with a minimum employee contribution of 4%
In Conclusion we can see that all three companies hold similar incentives and schemes for their executives and differences merely arise in the measurements and targets. Reason for these similarities occurring is reflective of the similar objectives the companies hold.
3.0 Recommended Remuneration Plan
The main purpose of remuneration is to attract & retain talent, motivate and achieve superior performance of the organisation all the while aligning the remuneration policy it to shareholders interests. Relating to the Watts & Zimmerman’s Positive Accounting Theory (1986) a remuneration plan can...
References: <http://www.crh.com/docs/2012-annual-report/report-on-directors-remuneration-2012.pdf?sfvrsn=2 >
Deegan, C, (2009) Financial Accounting Theory, 3rd , McGraw-Hill Australia Pty Ltd
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