HR plays a technical rather than strategic role in executive remuneration but this is likely to change, claims a recent report exploring executive remuneration practices in over 60 major public companies.

The research by Hewitt Associates found that in most cases, HR partners with the decision-making body to design the pay packages, although in 13% of cases HR was not seen to have a role at all. However, 53% of respondents believed that the market and public opinion would demand a stronger link between remuneration and performance creating the impetus for change in the future.

Half the companies surveyed said that changes would be driven by shareholder demand and the emergence of higher corporate governance standards. Market pressure for greater transparency and the greater demands on board members were also considered important.

Job responsibilities was the main criteria for setting executive remuneration packages according to the majority of respondents, with market practices and individual performance counting more as complementary elements in the decision.

In terms of bonuses, 90% of respondents said that the remuneration committee set the performance objectives for the CEO’s annual bonus, but it is less involved (61%) in the selection and succession process.

Nine out of ten respondents said that their company publishes the compensation package for the board as a whole but only half of the companies surveyed publish the individual pay package of executive board members.

Alan Judes, an executive compensation specialist at Hewitt said: “Policies and systems have to be decided and put in place, but alone this is not enough. Corporate governance practices need to be embedded and monitored on an ongoing basis throughout the whole organisation.”