Remuneration and Compensation
Compensating executives fairly requires many things: clear judgement, data to help you make informed and financially sound decisions concerning remuneration, an understanding of the relationship between performance and remuneration, and the cost and structure of each component that goes into an executive or Director’s remuneration package and bonuses.
You will need to understand:
- Your business
- Company values and culture
- Current arrangements
- Stakeholder interest
A Remuneration Committee serves to provide advice and assistance to the Board on issues relevant to remuneration of Board members, as well as senior management. The Remuneration Committee uses market benchmarks to set pay levels for senior managers and directors, retain and motivate executives, and ensure that the business can attract competitive talent and maximise company value for shareholders.
A typical committee has a minimum of three members and should consist exclusively of non-executive directors. The chairman of the committee must be an independent nonexecutive director, and the majority of committee members should be as well.