Newsletters
The subject matter of this publication is not static, and related issues of concern or interest crop up frequently. The newsletters included here are a form of editorial by the authors of the publication offering comment and explanation of these issues as they arise.
The most recent newsletters are listed here by date order, the most recent one first.
Likely increases in the fees of non-executive directors
We conjecture that increased time commitments will translate within a year into higher fee tariffs for non-executive directors for their 'services as directors', and explain how tariffs in the new required format should be set out.The disclosure of senior executive remuneration
In this further paper dealing with the implications of King III, we review the requirements of the Code in relation to the disclosure of the remuneration of senior executives.The timing of policy approval and disclosure
The requirement to obtain a non-binding vote of shareholders on remuneration policy is examined in detail, given that contractual arrangements will probably already have been concluded for the then current financial year.The avoidance of conflicts of interest – in perspective…
The common law regulating conflicts of interest between principal and agent carries one a long way down the road to the understanding of how incentives should be structured. King III reinforces this and puts the onus on to the Board to oversee incentive-based risk.Share scheme awards basis – equal opportunity or to be earned?
We review the four most frequently found methods for granting share-based incentives to senior executives, concluding that the "equal opportunity" and the "earn-out" approaches make the most sense.Presenting and dealing with the non-binding vote of shareholders
We review the practical implications of the requirement that remuneration policy should be presented to shareholders at the AGM for a non-binding vote of shareholders, and how the remuneration committee should deal with the outcome of that vote.King III requirements …towards a balance in remuneration structure
Over-aggressive variable pay policies may encourage the wrong behaviour. We consider here where one should draw the line and what the market norms are.The case for establishing a separate nomination committee
There is some formal recognition for the first time in the King Committee recommendations of the independent role of a "nomination committee".Will a new mandate be needed in 2011?
The need to mandate the Remuneration Committee with additional duties seems ineveitable in the light of the King III recommendations. We conjecture what these may be and what additional time will need to be devoted to the formal programme of the future.What does the word ‘stretch’ mean in remuneration parlance?
In formulating remuneration policies one encounters terms such as 'target', 'stretch' and 'equivalence of stretch'. All relate to target-setting in the determination of variable pay. We explain the algebraic formulae that can be used here.To view a more detailed summary of the content of the library - press OVERVIEW
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