Corporate Management - Remuneration & Corporate Governance

CORPORATE GOVERNANCE
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Table of Contents
Introduction.............................................................................................................................................3
Research Questions under review................................................................................................................3
Successful application of Executive remuneration plan by corporate......................................................3
Inefficient corporate governance for unsuccessful corporate...................................................................6
Conclusion...................................................................................................................................................7
Recommendations.......................................................................................................................................8
References:..................................................................................................................................................9
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Introduction
Executive remuneration and corporate governance are two sides of corporate management. One
side belongs to the justification of the remuneration promised to the CEO and executives by the
corporate and other side demands the justification of that remuneration to the stakeholders of the
corporate. High level of remuneration always has the threat of reducing the distributable profit
for the stakeholders and at the same time the executives and CEOs may have the tendency to
project their performance by any means to justify their remuneration. The CEO and executive
remunerations always comprise of long-term and short term benefits with distinctive division of
heads which include profit sharing and regular cash salary. Profit sharing may be in the form of
disbursement through share allocation or by cash1. It is always debatable if the area of corporate
governance should get involved in this area to prove transparency and justification of the
remuneration allocated to CEO and executives for the stakeholders2. This report will emphasize
on this specific issue in perspective of Australia with the application of different legislative
application implied by Corporation Act, 2001 and Australian Securities and Investment
Commission with the guidance provided for the corporate to practice the same in order to ensure
and save common interest of the stakeholders of the company and the future prospect of the
corporate3.
Research Questions under review
Successful application of Executive remuneration plan by corporate
This issue is raised with the basic questions of the authority of employment of the CEO and
executives and the need of their employment; the way the CEO and executives add value to the
1 Asic, Corporate governance - Executive remuneration, 2016
2 Asx, Corporate Governance Principles and Recommendations with 2010 Amendments, 2007
3 Peter Rampling, CEO and executive director remuneration practice and corporate financial performance: a
comparison of practices in the USA, UK and Australia, 2015
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