Many company boards are struggling to ensure their remuneration committees lift their game in order to achieve a high affirmative vote by shareholders to accept the remuneration report. Below is a checklist that we thought may assist in setting and evaluating the remuneration committee.
- All members are “independent”
- All members are appointed by Board or Directors’/Governance Committee
- Committee develops CEO performance contract
- Committee reviews executive officer pay results to ensure rewards are in-line with performance/shareholder returns
- Committee retains outside executive remuneration expert who works with both the Committee and management
- For the CEO and other executive officers, Committee approves program changes, share and option grants, and incentive and salary opportunities
- Committee regularly provides the full Board all necessary and pertinent information
- All regulatory requirements are fully met
- Executive pay guidelines are proactively discussed with major shareholder groups
- Any potentially controversial pay disclosure in annual remuneration report to shareholders is discussed in advance with the full board.