Asia Pacific companies are realigning their remuneration packages with those of more developed countries in a bid to attract and keep talent.
Executive pay packages in the region are starting to evolve, according to research from global expat benefits group Mercer’s 2012/2013 Asia Executive Remuneration Survey.
The study looked pay and packages for executives in more than 650 organisations across the region to compile some detailed conclusions.
The survey revealed that firms are putting together new mixed pay structures, incentive program and offering shares and long-term performance plans.
“This new turn towards non-financial remuneration shows that companies in Asia want to reward executives for hitting performance targets in the day-to-day business, but are also looking further ahead at giving extra to those who innovate and develop new business models,” said Hans Kothuis, Mercer’s Executive Rewards Practice Leader for Asia and Middle East.
Focus on profits
For example the report that companies are offering less in the way of stock options and have replaced them with a choice of two other rewards –performance cash and time-contingent restricted share programs.
Companies are also moving away from a focus on profits and want to create value in their businesses and better returns on investment for owners and shareholders.
“Managers should earn rewards for the value they create in a business, not just in the current operations shown by profit and increased efficiency,” said Mercer. “Innovation and diversification are just as important.
“Asia needs more reform of the labour market for executives and they need to have pay and remuneration that is equal to their colleagues in more developed economies. The market is improving. Young executives in the Asia Pacific are demanding change and companies and investors need to rely on these executives to deliver the growth they are seeking.”
Corporate gap narrowing
Many companies, say Mercer, have a challenge in attracting and retaining the talent they need to shift their businesses up in gear. So, they are looking at leadership development, succession planning and other ways to motivate executives to perform.
Mercer demonstrates this by comparing the study results of Asia Pacific based companies with companies from outside the region with a large presence in Asia.
By looking at six factors and measuring the results, it’s easy to see how the gap between business thinking in the East and West is narrowing:
| Factor |
Importance to Asian firms |
Importance to Non-Asian firms |
| Succession planning |
75% |
75% |
| Motivation |
74% |
74% |
| Leadership development |
71% |
73% |
| Talent retention |
63% |
68% |
| Talent attraction |
51% |
55% |
| Risk management |
39% |
46% |
Source: Mercer
