Effective Remuneration Strategy in a Group Structure

Effective Remuneration Strategy in a Group Structure

The question of what remuneration strategy to adopt in a group structure is one that continues to pose a challenge to many companies (multinationals and locals).

Wale Ajayi

Partner & Head, Tax, Regulatory & People Services

KPMG in Nigeria

Effective Remuneration Strategy in a Group Structure

Should employees be paid the same across operating companies (OpCos) or should they be paid according to their respective talent markets? How does the choice of pay strategy impact ability to transfer talent among OpCos? What should be the key factors and drivers of a group’s rewards strategy? This publication covers group arrangements where there is a holding company (HoldCo) and common control / ownership and attempts to address the issues from a broad perspective, covering both local and multinational companies as much as possible. The publication is in line with KPMG’s commitment to supporting organisations to take informed decisions on leveraging a sustainable and effective remuneration strategy to drive corporate objectives.

Organisations typically evolve into a Group Structure for many reasons such as: consolidation of ownership in different companies; backward and/or forward integration; diversification; growth and expansion; specialization and competitive advantage, etc. As with the group structure/strategy, the business must continuously review the question of what is the optimal and sustainable remuneration strategy to support creating value for all stakeholders.

Adopting a strategic approach to group remuneration is at the heart of driving alignment, relevance and sustainability across the constituent OpCos, as well as promoting a high performance culture.

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