Neil McCawley, head of group total rewards at Ferguson plc, on working with the RemCo

We spoke to Neil McCawley, head of group total rewards & Ferguson Group Services HR at Ferguson plc, about his personal experience of working with the RemCo.

What the role involves

Ferguson plc is the world’s leading specialist distributor of plumbing and heating products. It is listed on the London Stock exchange and a constituent of the FTSE100 index.

Before McCawley took on responsibility for working with the RemCo he was the UK head of reward and had been for a number of years. In 2015 the group head of reward moved on, and having worked with the team on another project, he was given a trial in the group head of reward role.  

Although he had had experience of helping to pull together the numbers and figures that the RemCo needs, he did not have the full knowledge to put together everything that was required.

“I was fortunate that they brought in a consultant – a RemCo expert to work with me for three to six months – this helped me a lot in terms of preparing the papers to go to the committee and the complexities surrounding this process,” he says.

The ‘papers’ relate to proposals for executive remuneration. They can be targets for executive share plan grants, performance-related awards, details about how many senior managers and directors will receive awards, costs of awards, targets proposed for these awards, and so on. These papers can be written out or produced in power point depending on what it’s for.

The role that he does is two-fold: “Working for the Company – I would prepare all of the papers that relate to reward that then go to the RemCo for their meetings. Some companies will have different numbers of meetings. We have six a year, with a RemCo at each of them apart from January.

“Second, is working with the RemCo Chair and agreeing with her an agenda for the whole year (that moves depending on what’s happening) and each specific meeting. We agree what’s on the agenda and what papers we’re proposing from the Company and get the Chair’s input on the papers they want,” explains McCawley.

Essentially he has to ensure the RemCo Chair has all the information needed to run the meeting, take feedback from Board members and enable the Company to input their thoughts and proposals to any of the elements of reward they’re involved with.

Day-to-day responsibilities

Preparing proposals and papers for the RemCo is a large part of the role. Coupled with this is the need for corporate governance compliance. In fact, any papers need to be compliant before they are put to the RemCo. As such, McCawley explains that he will often work with the company secretariat team, a RemCo adviser and, when needed, legal advisers who specialise in corporate governance, to ensure they fully compliant with the remuneration policy.

He adds: “When we’re proposing changes [in the papers] we have to cover off the rationale behind the changes. We try to keep the papers short, but they also need the detail.”

Other duties include drafting the remuneration section of the organisation’s annual report, supporting the RemCo Chair with any questions that might come back from the Board and consulting with key stakeholders with regard to the remuneration policy.

A good example of the type of task McCawley is involved with is the recruitment of senior staff. The organisation is currently seeking a new CFO, and as such McCawley is involved with sourcing benchmarking data for their remuneration package, and more often than not, will require a share buy-out, so again he is involved in deciding what to offer.

Advice for aspiring reward professionals

“I’m not sure all roles are identical – but you need confidence as you’re presenting to the Board and they can be challenging sometimes – half of our Board based is in the US and half are British – so there is a difference in terminology and presenting. We talk about max bonus but they talk about target bonus. There are different nuances, as well as currency considerations.

“You sometimes get push-back that you need to not take personally. The Board is there is provide the controls and check on the Company, and that they’re doing the right thing for employees, customers and shareholders,” says McCawley.

For those looking to move into this type of role there are training courses available, such as those run by Willis Towers Watson or Strategic Dimensions, which has a performance and reward arm called PARC that offers a range of training on governance, share plan designs, executive compensation and more.

McCawley believes that training courses can be really useful due to the complexities of corporate governance and the need to understand how these factors impact on executive remuneration.

“If you’ve got the opportunity to go on a course then look to try and do that, and networking is really useful as well…try to get yourself into roles where you can get exposure and experience of doing work with the RemCo,” concludes McCawley.

The author is Dawn Lewis, content editor at REBA.