A Guest Lecture by Mr. Martin McGuigan
AON Hewitt, a Fortune 500 company, provides human capital and management based consultancy services all over the globe. It currently operates 500 offices in over 120 countries with Dubai office situated in DIFC.
On Wednesday, 20th August we had Mr. Martin McGuigan, heading Aon Hewitt’s Executive Compensation and Reward line of business for the Middle East, to deliver an interactive guest lecture on Executive Compensation to IMT’s HRM students. Dr. ArunPrasad Purshottam (Professor of HRM) organized the lecture for his Compensation and Benefits Class.
An external body called the ‘RemmComm’ (Remuneration Committee) sets executive compensation for the approval of shareholders for a company. The factors affecting its decision involve Size of Pay, Pay at Risk, Visibility, Long Term Strategic Intent and Governance. This body also fixes the incentives with incentives being more than 50% of the base pay in most cases. The LTI factors in consideration are Objectives, Eligibility, Incentive Vehicles. Performance period. Grant Cycle, Vesting Period, Performance Metrics and Quantum of Pay. Each of the above terms was explained in detail with several examples. Various concepts like High Tide Concept, Good Leaver and Performance based Pay were also covered.
Interesting and innovative examples included that of Saudi Arabia being the best GCC company is terms of executive pay disclosure, Whole Foods (USA) CEO’s pay being only 15 times the pay of an average worker, Etisalat trading only 2% of its shares in market etc.
The lecture ended with a question and answer round. Questions put up included “Possibility of a equity and cash based incentive plan”, “Qualities AON Hewitt looks for in its new recruits” etc. All students thanked Mr. Martin for the enriching lecture and Dr. Arun, who’s initiative made the lecture possible.