Many family or owner-managed companies do not follow any particular remuneration strategy and simply leave matters to market forces. Whilst a rigid set of rules may well be inappropriate, nevertheless proper remuneration planning can be to everyone’s advantage.
Owner-Managers
Owner-managers face a number of factors in deciding on their own remuneration levels and structure:
- the level of remuneration they require to maintain their standard of living
- the financial position of the company – including the possible requirement to maintain a certain profit level to address reinvestment issues
- the need to make suitable pension provision – certain remuneration levels may have to be maintained to allow for pension funding levels to remain adequate. This is especially the case where the owner-manager does not have a SART
- the requirements of outside investors or lending institutions in relation to remuneration levels
Senior Managers
Senior managers will also have requirements which may be in conflict with the owner-managers or shareholders employing them. The issue of incentive-based remuneration will be important. Incorrectly designed incentive schemes can be demotivating, result in the opposite outcome as was envisaged when the scheme was established.
There may also be issues around perks and benefits such as company vehicles, pensions plans, club memberships, etc.
General Staff
The general staff of the business will have their own agendas too. Their first concern will be an appropriate level of basic remuneration, but they will also be interested in fringe benefits and performance-related bonuses.
How We Can help
We have extensive experience in restructuring management and staff remuneration packages to reduce the cost to the business while retaining or improving the levels of net salary received by individuals.
Our key areas of expertise include:
- Implementation of pension and SART strategies
- Advising on the implications of the new BIK rules
- Employee share incentive schemes
- PAYE/ PRSI compliance reviews
- Structuring termination packages
- Payroll services
For further assistance in this area please contact:
Robert Browne
Tel: 046 943 7900
Mob: 087 413 3975
Email: rbrowne@ohd.ie
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