However, the agreement provides that the total amount of compensation can be paid within 12 months of the signing of the agreement if sufficient resources are mobilised for this purpose within that time. Local inflation can also play a role in influencing global wages, with Latin America, the Asia-Pacific region and Europe currently the most affected regions. Nevertheless, two-thirds (66%) the company we interviewed does not expect inflation to affect wages. Many of the companies surveyed identified Latin America as a problem. Many countries offer a “high” base salary or “guaranteed cash compensation” that includes allowances for goods such as housing, transportation, education or even a 13th month`s salary, sometimes called a Christmas bonus. Balancing a comprehensive wage strategy to comply with local laws and be locally competitive can be more complex and costly than expected. Part of the solution should be addressed at an early stage as part of the recruitment and recruitment process. Companies typically spend years developing and designing local wage practices and philosophies. Before becoming global, the remuneration strategy should be tested on the basis of the multinational business strategy. What are its strengths and weaknesses? Where should additional guidelines be developed and how will global variables affect future philosophy? While this article focuses on cash components and long-term incentives (“LTIs”), this philosophy should focus on all elements of rewards, including benefits and annuities. As companies around the world continue to seek growth and supply chains on all continents, we expect this group of executives at one level to grow. Future heads of state and government are expected to understand and involve their global population, while the country of origin intends to continue to oversee and evaluate performance.
Often, companies try to maintain compensation worldwide by maintaining internal salary capital. One of the objectives may be, for example, that all heads of state or government be paid within 10% of each other. But this can have the opposite effect, as the purchasing power of countries will lead to wage inequality. A guide who lives in an area where the cost of living is lower is enriched by such a program. Wage inequality is exacerbated only by annual and long-term incentives, which are generally allocated as a percentage of base salary. One of the unique aspects of their compensation package is that they are paid and encouraged within one band. Their base salary is not tied to their current global territorial scheme, but to their “global manager” colleagues. Annual incentive metrics are designed to align with the company`s core objectives, but they have regional influence.
