Governance and effectiveness review

Some components of director remuneration may conflict with the fiduciary demands of directors. Examples could include service based payments, such as defined benefit retirement benefits, or restricted share programs. However, there may be a requirement for remuneration to vary with general governance requirements to ensure shareholders are better served. n example may be to provide options in lieu of cash fees for small, high growth companies. In addition, companies may need to review non-executive director pay structures juxtaposed with those of executive directors. Are they complementary? If a chief executive ‘s remuneration is heavily leveraged for revenue and/or earnings growth, should non-directors’ pay be more risk averse to balance the competing demands between entrepreneurialism and risk management? The component and structure review will seek to answer these questions.