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I have a few questions in regards to pay (remuneration) of the board of directors and the sub-committees
1) Who sets the pay for the non-executive directors on the board? ( I understand that the remuneration committee set the pay for the executive directors on the board and the chairman)
2) Who sets the pay for the audit, nomination and remuneration committees?
It makes sense to me that no executive or non-executive director can set their own pay. However, if for example, the remuneration committee set the pay for the chairman and then the chairman sets the pay for the remuneration committee, there will be obvious problems e.g working in collusion to decide that both parties will be paid highly. I would be most grateful if someone can provide advice on this area?
Many thanksLook on the Internet for the company Devro that I refer to endlessly in lectures
Within Devro you will see that there are in fact 2 remuneration committees.
There’s the executive directors’ remuneration committee formed entirely of neds and
there’s a non-executive directors’ remuneration committee formed entirely of executive directors
And yet I still hear you say “surely there’s cross-over and potential for collusion”
“I’ll see that your salary is increased by 10% if you do the same for my fee level”
Ah but! Both these two sub-committees enlist the professional assistance / advice of a well-known recruitment agency highly experienced in knowing and advising on the levels of directors’ remuneration and fees
You should download Devro financial statements / annual report
It is FULL of stuff relevant to P1
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