Guidance on executive and non-executive director remuneration has been published by the International Corporate Governance Network (ICGN).
The new guidance aims to provide a consistent perspective of remuneration policy and practice designed to help companies better understand long-term shareholders’ views, and serve as a tool for investors engaging with companies.
The executive director guidance provides greater clarity on committee leadership; refers to motivational considerations beyond financial remuneration; provides that base salary is payment for achieving what is expected of the executive, and variable remuneration is payment for out-performance; and includes environmental, social and governance factors in the assessment of performance to help achieve sustainable long-term value creation.
The non-executive director (NED) remuneration guidance outlines how board chairs should be paid and defines the expectations of non-NEDs to attain a significant shareholding.