Executive directors report

Executive remuneration is a multifaceted issue which has perennially caused significant debate among shareholders, business groups and the wider public.

Overview

Executive directors face a number of challenges, and their companies are increasingly being held to account for their contribution to social upliftment in the face of pervasive inequality. Fair and responsible remuneration is a concept that must be implemented in relation to employees across an organisation, and remuneration committees must place special focus on pay conditions for junior employees.

Remuneration paid to executive directors must be justifiable to all stakeholders, not just the shareholders, and recent corporate failures have called into question, inter alia, whether companies have adequate risk adjustment mechanisms in place for executive remuneration.

Traditionally, remuneration benchmarking has been one of the primary tools used to attract and retain employees who are critical to the performance of an organisation. We critically assess the future of benchmarking, and suggest a new approach that would be more relevant in today’s environment.

While gender parity has been under the spotlight for a number of years, progress on adequately addressing the issue has been slow. Companies need to take gender equality more seriously in all areas, including by eliminating unjustified pay differentials between men and women. 

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