Four Roles of Remuneration Committee

Four Roles of Remuneration Committee

(1) Complying with laws and best practice

• To ensure that executive directors do not set their own remuneration.
• Remuneration committee should be staffed by non-executive directors.
• To ensure compliance with any relevant legislation.

(2) Establishing General Remuneration Policy

• Consider pay scales foe directors, taking into consideration the remuneration offered by comparable companies.
• Consider what relation remuneration should have to measurable performance or enhanced shareholder value.
• Consider when directors should receive performance-related benefits.

(3) Determining remuneration packages for each director

• To establish packages that will retain, attract and motivate directors whilst taking into account the interests of shareholders.
• To consider how different aspects of the package are balanced.
• To consider what measure are used to assess the performance of individual directors.

(4) Determining disclosure

• To consider what disclosures should be made in the remuneration committee report in the accounts, in the corporate governance section.
• The report includes details of overall policies and the remuneration o individual directors.