What might the introduction of remuneration structures aim to achieve?

The introduction of remuneration structures is fundamentally aimed at aligning employee compensation with the overall business strategy and risk profile of the organization. This alignment ensures that the financial incentives provided to employees promote behaviors that support the company’s long-term goals and objectives. By linking pay to specific performance metrics that reflect both strategic priorities and acceptable levels of risk, organizations can foster a culture that emphasizes accountability, productivity, and ethical behavior.

This approach achieves several outcomes: it motivates employees to work towards the company’s strategic goals, reinforces desired behaviors, and can help in managing risks effectively by discouraging excessive risk-taking that might arise from poorly structured incentive plans. Furthermore, a well-designed remuneration structure considers the organization's risk appetite and ensures that employee rewards do not incentivize actions that could lead to substantial financial loss or reputational damage.

In contrast, options such as compensation unrelated to performance metrics, increased fixed pay for employees, or significantly higher salary caps do not focus on this critical alignment aspect. Instead, those options risk creating a disconnect between what employees are paid and the value they bring to the organization, which can ultimately undermine performance and strategic objectives.