Companies Step Up Centralized Benefits and Compensation Management

September 13, 2006 ( - More than half of companies with at least two operations out of the country plan to shift to a more centralized compensation and benefits structure over the next two years, according to a recent survey.

The survey by Watson Wyatt Worldwide of 275 companies showed an increase in the number of companies planning to do this – from 42% in 2004 to 56% – to achieve a more unified benefits structure for employees and executives across all countries in which they operate.

The authors of the survey attribute some of the push to centralize benefits and incentives to regulations requiring more extensive reporting and more stringent corporate governance rules, according to a news release.

Most of the companies surveyed manage executive compensation, long-and short-term incentives and performance management on a global basis largely because the programs are linked to a company’s rewards and performance measures. The survey found that 45% of companies already have corporate governance methods in place that require benefits changes to be approved by global or regional management; however, 64% are working on ways to bolster corporate governance across all borders.

According to the survey:

  • 92% of the companies manage executive compensation globally.
  • 79% manage long-term employee incentives globally.
  • 48% manage performance globally.
  • 42% manage short-term non-executive incentives globally.

However, the survey found that 89% of companies manage perquisites on a regional or local level; 87% manage health and welfare on a regional and local level; and 83% handle retirement on that level.