Académique Documents
Professionnel Documents
Culture Documents
Director's Remuneration
General principles of remuneration
Director's Remuneration
The purpose of directors' remuneration is:
The main way of doing this is to ensure that executive reward packages are
aligned with the interests of principals (shareholders) so that directors are
rewarded for meeting targets that further the interests of shareholders.
Syllabus A5ac)
A5a) Describe and assess the general principles of remuneration.
iii) links to strategy
iv) links to labour market conditions.
A5c) Explain and analyse the legal, ethical, competitive and regulatory issues
associated with directors remuneration.
A basic salary is paid to directors in line with their terms and conditions, and
is not related to any other conditions.
This salary is calculated by taking into consideration the experience of the
director, and what other companies are willing to pay which ultimately
dictates the current market conditions.
Remuneration packages should be set by a remuneration committee
consisting of independent non-executive directors to ensure that packages
are equitable, and appropriate according to performance and in line with the
organisations remuneration policy.