Remuneration practices within Southern Europe

The recent general meeting season has confirmed a substantial alignment of Southern European companies’ remuneration policies to international best practices favoured by institutional investors. The race to achieve high market approval levels has, in some cases, led companies to design ‘standard’ incentive plans, reflecting proxy advisor guidelines, commented Fabio Bianconi, Director at Morrow Sodali, on Ethical Boardroom.

The obvious advantage is that of mitigating criticism and the potential opposition of shareholders to the adoption of the remuneration policy. But such defensive behaviour could cause the failure of the plan to address management toward the strategic goals of the company.