With governments around the world taking action to clamp down on “excessive” executive pay, companies will find it increasingly difficult to maintain a consistent approach to remuneration policy compliance, according to law firm Clifford Chance.

The firm has published a briefing note that analyzes the legal and regulatory response to concerns about pay levels in five key jurisdictions: the United States, Germany, France, the U.K, and the Netherlands. It also looks at what the European Commission has said on executive pay.

For companies that have operations in more than one of these jurisdictions, “The extra-territorial application of many of these legislative measures and codes of practice is currently unclear,” the firm says. “Many of these reforms are similar in nature, but there are significant differences in the detail and the consequences of non-compliance. Some institutions may find that a global remuneration policy cannot be maintained in light of mandatory provisions.”

The U.K. is the latest country to act on executive pay, amid concerns that senior figures in the finance industry have been rewarded for failure or were incentivised to take reckless risks.

The Financial Services Authority (FSA) has published a draft code of practice on remuneration policies that it said would “ensure that firms have remuneration policies which are consistent with sound risk management, and which do not expose them to excessive risk.” The regulator said it did not want to set levels of remuneration, as that was a matter for boards and shareholders.

The FSA code is subject to consultation throughout March.

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