- 15 Marks
CSME – May 2022 – L2 – SC – Q6 – Corporate Governance
Discuss the purpose of board remuneration, the role of the remuneration committee, and the challenges of linking board pay to company performance.
Question
At the Annual General Meeting of TAIMAKO Nigeria Limited, shareholders expressed displeasure about what they considered to be excessively high remuneration paid to members of the company’s board of directors. Some shareholders believed that board remuneration should be tied to the company’s financial performance. Consequently, a group of shareholders has asked you to advise them on the position of the Code of Corporate Governance on remuneration of directors.
Required:
a. The purpose and structure of the remuneration package for board members. (5 Marks)
b. The role of the remuneration committee. (5 Marks)
c. The problems of linking board members’ rewards with the company’s performance. (5 Marks)
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