Natural Incentive, "Format"

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February 22nd, 2013 - Vienna, Austria - German companies are beginning to develop new bonus systems designed to convey environmental targets. In Austria, most companies are still reserved.

It seems a simple calculation: The more profit a manager generates for his company, the higher his bonus. But now there are signs of a change of mind. Deutsche Bahn coupled bonuses this year for the first time to the achievement of environmental targets and customer satisfaction, and sets new standards of executive bonus systems. Other German companies intend to follow their example.

In Austria, bonus systems that take sustainable goals into account are rare. "Frankly speaking, the supervisory board expects yearly results. Long-term goals for periods of two to three years are rare exceptions in Austria", says Conrad Pramböck, Head of Compensation Consulting at Pedersen & Partners.

 

        Photo by René Prohaska - Trend

In 2008, an EU directive regulated bonuses in banks and demanded that bonuses for executives and other risk takers are paid out over a period of several years. However, companies implemented this regulation only reluctantly. "The idea is well inteded. However, it is faced with practical problems", explains Pramböck. "When a manager stays in the company, he receives his bonus in future years. When a manager retires early or gets fired, he gets the entire bonus immediately."

The solution for more sustainable thinking and acting in companies: Retain managers and employees for a long period of time, when good and bad business years will even out. "The solution is not to influence executives via a bonus system but to recruit only managers where sustainability is a concern from the outset", says Pramböck.

Written by Alexandra Rotter for Format

In the mediaAustriaVienna