Executive compensation is how top executives of business are paid. This includes a basic salary, bonuses, shares, options and other company benefits for work on the Board of directors. Over the past three decades, director remuneration has risen dramatically beyond the rising levels of an average worker's wage.
The remuneration committee is responsible for the executive compensation. There are two different words for the same concept but one is used in UK (Remuneration) and the other in USA (Compensation). The aim of this Committee is to develop a remuneration policy in order to attract, retain as well as motivate the top executives in business companies. This group of people is fundamental for a company. They possess the skills needed to achieve the Company’s objectives year by year and balance the interests of the shareholders, the Company and its employees. The remuneration Committee is also responsible for ensuring that the appropriate procedures exist and are applied for the remuneration levels of the Chairperson, Non-Executive Directors, and Executive Directors, direct reports to the Chief Executive Officer/President, Board Committees and the Board as a whole.
Over the last decades the executive remuneration has considerably increased its quantity, although now we are facing a world crisis and we have to reconsider their payments. That is why nowadays the remuneration committee is having a prior importance. In the next lines we are describing more detailed all the responsibilities the Remuneration Committee has:
Making recommendations to the Board for appropriate remuneration, in relation to both the amount and its compositions, for the Chairperson, Non-Executive Directors, Executive Directors, the Chief Executive Officer/President and Senior Executives. Developing and recommending to the Board remuneration incentive programs such as bonus schemes, long term incentive plans and Company share schemes.
Developing, maintaining and monitoring appropriate remuneration policies and procedures.

Developing, maintaining and monitoring appropriate recruitment, retention, termination policies and procedures for senior management.
Developing, maintaining and monitoring appropriate superannuation arrangements for the Company.
Developing remuneration related disclosure objectives for the Company and ensuring that publicly disclosed information meets those objectives, meets all legal requirements and is accurate.
There are five basic tools to compensation or remuneration.

• a base salary
• short-term incentives, or bonuses
• Long-term incentive plans LTIP
• employee benefits
• perquisites

Corporate Governance Datasets

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  • European perspective

    Even if remuneration is not a real factor of motivation according to most of the recent research (Maslow, Herzberg), the salary is the first point in a remuneration strategy, because without a certain level of remuneration the primary needs of people are not satisfied, and if they are not satisfied, workers cannot be efficient. But in reality, is executive pay linked to company’s performance?   xxxx

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