Agree any compensation for loss of office of any executive director.Demonstrate to shareholders that the remuneration of the executive directors and key management is set by individuals with no personal interest in the outcome of the decisions of the committee.Ensure that the executive directors and key management are fairly rewarded for their individual contribution to the overall performance of the company.Set detailed remuneration for all executive directors and the chairman, including pension rights and any compensation payments.Establish pension provision policy for all board members.Recommend and monitor the level and structure of the remuneration of senior managers.Determine and regularly review the framework, broad policy and specific terms for the remuneration and terms and conditions of employment of the chairman of the board and of executive directors (including design of targets and any bonus scheme payments).The overall responsibilities of the remuneration committee are to: Responsibilities of the remuneration committee The whole area of executive pay is one where trust must be created or restored through good governance and this is exercised through the use of a remuneration committee. Reporting is clear, concise and gives the reader of the annual report a bird's-eye view of policy payments and the rationale behind them.Performance packages produced are aligned with long-term shareholder interests and have challenging targets.It has a clear policy on remuneration that is well understood and has the support of shareholders.The committee is, and is seen to be, independent with access to its own external advice or consultants.
This definition creates a good balance between the opposing viewpoints of stakeholders. The role of the remuneration committee is to have an appropriate reward policy that attracts, retains and motivates directors to achieve the long-term interests of shareholders. The report focused on providing a means of establishing a balance between salary and performance in order to restore shareholder confidence. This committee was formed to investigate shareholder concerns over director's remuneration. The Greenbury Report (1995) contributed to the existing code with regards to directors' remuneration. 1 Development of corporate governance regarding directors' remunerationĪs discussed in chapter 2 the development of corporate governance codes is closely associated with the UK.
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