Positive Accounting Theory and in line with the cultural and financial reporting context of I-J. 2. Remuneration Comparison We aim to compare and contrast both the similarities and differences amongst three hoses companies remuneration plans, CAR, Kingship and Marshall. Below we have selected numerous sections of the companies remuneration plans in which to examine closely. 2. 2 Primary Objective Each company examined, CAR, Kingship and Marshall 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. . 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.

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CAR – Performance Related Incentive Plan This plan implemented by CAR 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 CAR shares. This is in line with shareholder objectives. CAR also offer share plan Kingship – Performance Related Bonus Kingship 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. Marshall 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%. 2. 5 Benefits In addition to the base salary received and performance related benefits all companies we examined offered executives use ofa company car as well as health/ medical insurance.

Page 2 Remuneration and Sustainability Analysis Essay

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 encouragedto enable executives to make appropriate provisions for their retirement. CAR Two thirds of career average salary at retirement for full service Kingship Calculated on individuals base salary and consider age, length of service and years until retirement.

Marshall 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 organization all the while aligning the remuneration policy it to shareholders interests.

Relating to the Watts & Zimmermann Positive Accounting Theory (1986) a remuneration plan can therefore be created based upon the following theories and perspectives. The first aspect of remuneration is to attract & retain talent and this is usually done by fixed remuneration which ties in with price protection since principals anticipate for agency costs and the problems associated with fixed remuneration is that there is risk aversion meaning restricted motivation to increase value of organization vividness etc.

The second part of remuneration is to motivate and achieve superior performance which is linked to bonus plan hypothesis as managers are more likely to use accounting methods that increase company performance whilst increasing their chance of getting a bigger bonus. The last part of a remuneration plan is to align all the above to shareholders interests. This is essentially the agency relationship which is defined as a contract under the principal engages the agent to perform some service on the principals behalf.

Under this contract shareholders use audited ports and financial statements to monitor the performance of agents which is a monitoring cost to firm (auditing) and a bonding cost for agents (producing the statements for shareholders) So taking into consideration all the factors stated above a remuneration plan for CAP should consist of a fixed remuneration such as a salary that recognizes a minimum effort of agent’s contract. Bonus scheme should be recognized with measures such as the expansion of the business as it is a new subsidiary in a new market.

In relation to the cultural and financial reporting context in UK it is seen that under Positive Accounting Theory the assumption is that all individuals are driven by self- interest and will act in an opportunistic manner to the extent that the actions will increase their own wealth, this is direct link to individualism seen in ‘The Hefted Centre’ as in the I-J individualism is with a score of 89 meaning the people are highly driven by self-interest. 4. 0 Sustainability Report Comparison 4. Similarities All of the companies mentioned in this report have won many awards for their environmental sustainability practices which indicate to their shareholder and other takeovers that they are serious about preserving the environment. All of these companies have a standalone sustainability report that biblically discloses information regarding their environmental sustainability practices. All the companies set specific targets in terms of environmental performance and in most cases they meet their targets indicating that they do have social and environmental interests in mind.

There are five levels of sustainability reporting which are no reporting, basic, moderate, detailed and comprehensive (SACS 2013) and according to great deal of information in all the companies sustainability reports it can be said that all of the three companies are taking on a comprehensive level of sustainability reporting. Finally, all of the companies have improved a great deal during the last few years. Continuous improvement in this area is extremely important especially when it comes to the publics perception of the company. 4. Differences Out of the three companies discussed in this report Kingship reports on carbon shows a lot more figures for their overall performance compared to CAR and Buffalo Beauty. But overall there are no major differences in the material discussed in the sustainability reports of these three companies apart from the fact that they each put more of a focus on different areas of sustainability reporting. Also the way in which they display their performance differs slightly, for example, Marshall (Marshall 2013) uses mostly Just written information and CAR uses a lot of graphs (CAR 2013) to show the performance of their company. . 3 Charming Building Products Ltd Sustainability Reporting Practices It would be wise for Charming Building Products Ltd to voluntarily disclose information regarding their environmental practices so that the activities of the origination are perceived by the public as being legitimate (Degas, 2009, p 325). It would be expected, by society, that a large company such as Charming Building Products Ltd, listed on the London Stock Exchange, would undertake appropriate environmental sustainability practices and disclose their performance regarding these sustainability practices.

Failure to undertake in the activities that are expected by society may, according to legitimacy theory, result in the entity no longer being considered legitimate and may impact on the support it receives from the community ND may even have an impact on the company’s survival (Degas, 2009, p 391). 5. 0 Conclusion In conclusion we have suggested a remuneration plan consisting of a fixed portion that being, salary and a variable portion based upon the executives or groups overall performance in relation to set targets.

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