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Dear Sir/Madam,
1) Who determines salary of NED?
2) How many NED’s should be in
i) Remuneration Committee
ii) Nomination Committee
iii) Audit committeeIn an ideal World, there will be a “non-executive directors’ remuneration committee” If you listen to the lectures on this site, I keep referring to the company called DevroPLC. Download for yourself a copy of the Devro latest financial statements and annual report.
It is P1 from start to finish! There are neds, sub-committees, corporate social responsibility reports, risk analyses and steps to mitigate the effect of those risks – there is everything in there that I talk about in P1 lectures.
To the extent that students on my courses say “Oh no! Not Devro again!”
Number of neds in different sub-committees?
If there are two separate remuneration committees (as there are in Devro) the executive directors’ remuneration committee should comprise purely neds – ideally 3
The non-executive directors’ remuneration committee should be entirely executive directors, again, ideally 3 (in Devro there are only 2 executive directors)
Nomination committee? at least three directors with at least 1 executive director but there should be a majority of non-executives. So, in a committee of 3, there should be 2 non-executives and 1 executive
Audit committee? at least 3 and all of them non-executives with at least 1 who has relevant recent financial experience
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