Remuneration Committee is having a hard time


Remuneration Committee is having a hard time

Summary of an interactive Masterclass by Management Scope, Allen & Overy, Vlerick Business School, and Deloitte.

New remuneration legislation, sustainable bonus criteria, the call for transparency, and crumbling public support: remuneration committees are struggling. Due to the Corona crisis, executive remuneration is even more under fire. "You can't close your eyes to the current juncture."

It is said that the toughest committee on the Supervisory Board is not the time-consuming Audit Committee, but rather the Remuneration Committee. The 'RemCo' often faces difficult dilemmas about remuneration policy for directors. After all, the theme is politically and socially extremely sensitive. Proposals to increase salaries or bonuses for top executives regularly led to criticism in society and/or were voted down by shareholders over the past year. Reputational risk is constantly lurking. COVID-19 has put the remuneration policy even more under the social magnifying glass.


More non-financial reward criteria

The remuneration case has been facing increasing regulations. There is also growing pressure to apply more and more non-financial measures, such as sustainability goals. Companies are expected to focus on long-term value creation for a wide group of stakeholders, and the remuneration policy must support this. The RemCo has the task of taking all interests in the remuneration proposals into account, with an eye for public support. Not an easy task, as emerged during the masterclass. RemCo chairmen and members of listed companies were virtually present. In addition to an outline of the latest developments in the field of executive remuneration, there was room for discussion and the sharing of dilemmas and practical experiences.


RemCo Masterclasses

These Masterclasses by Management Scope and Deloitte are being organized specifically for members of the Remuneration Committee. They occur bi-monthly and each Masterclass focuses on a relevant topic, with insights from multiple panelists. 

Article in Management Scope

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