London, 6 February 2017: The Maturity Institute (MI), in conjunction with OMS LLP, releases today its CEO remuneration model: a unique CEO valuation and remuneration system developed from MI’s ground-breaking framework and its highly rated exemplar organisations.
The CEO Rem model is MI’s Global CEO pay and value standard and can be utilised by boards, investors and other corporate stakeholders. The key features of the MI Model include:
- An objective, independent assessment of CEO Value based on the MI approved and globally recognised OMINDEX©* ratings methodology.
- The setting of CEO pay based on a formula of Total Stakeholder Value (TSV©) comprised of Price-to-Book ratio (P/B)** and OMINDEX
TSV = P/B x OMINDEX
Paul Kearns, MI Chair and Senior Partner, OMS LLP, said: “Boards, investors and other key stakeholders now have a coherent model and a responsible and highly practical CEO Remuneration System that they can use to drive lasting value for their organisations, including for CEOs themselves, who can now be more accurately valued and rewarded in terms of their contribution to the business.”
John Mansfield, MI Project lead said: “After many years working in executive remuneration it has been truly exciting to develop a unique CEO Remuneration Model that replaces an executive pay paradigm that is now widely recognised as unfit for purpose. For the first time, we have put forward a proven and workable solution that fits with long term, sustainable value goals.”
*OMS LLP’s OMINDEX© provides a unique perspective on company value creation, linking effective human governance with higher material value and lower risk.
**Price-to-Book ratio is market value divided by book value where market value is synonymous with market capitalisation and book value with net asset value.