'Exec's bonuses measured non-financially'

News Article - 10 December 2007
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Big businesses are no longer relying on financial data to set salaries for their top executives and leaders, new research has found.

According to a report by Big Four firm PricewaterhouseCoopers 57 per cent of bonus schemes are measured with non-financial methods such as corporate and social responsibility, environmental issues and employee engagement.

This is a rise of 22 per cent on last year, claims the firm, adding that less than 20 per cent of companies use solely financial metrics to decide bonuses or rewards.

"There is now a great opportunity for companies to consider how such metrics support the long-term sustainability of the business in the broadest sense, both in terms of relevant operating measures and corporate and social responsibility goals," commented Matthew Thorogood, partner at the firm.

According to the company, such methods can be beneficial in the long-term, giving the actions of executives increased relevancy and better communication of business strategy.

PricewaterhouseCooper's stake-holder group Report Leadership recently launched an initiative to improve the articulation and detail about executive bonuses included in company reports.

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