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What affects the advice of executive pay consultants?

Executive pay consultants have a significant influence on the design of pay for FTSE 350 and other large organisations. Research interviews with 20 top consultants identified the key factors influencing their advice and their client relationships.

The last group of factors, being specific to the individuals, is important to understand. A greedy or aggressive CEO can have a significant impact on the nature of his or her pay. The internal adviser, although technically helping the remuneration committee, can have considerable influence in steering the pay of their executive colleagues.

The consultants also identified some of the important features of the remuneration committee and its chair, highlighting their need for engagement and a willingness to tolerate complexity, as well as the independence of mind sought by governance regulation.