An appropriate regime for the remuneration of executives

Increased resistance to excessive levels of remuneration for executives and the need for sound corporate governance in this context requires attention to be focused on achieving an appropriate regime for the remuneration of executives. This paper considers four different approaches that could be used to achieve this. These are the requirement of disclosure of details of remuneration, the appointment of remuneration committees who are given the task of determining remuneration packages, the linking of pay to performance so that executives are not rewarded for failure and giving the shareholders the opportunity to vote on the remuneration policy of the company. The paper considers the approach adopted in Australia, the recommendations made by the European Commission and the highlights the position in South Africa.