The compensation committee and the remuneration of the directors

Pucheta‐Martínez, María Consuelo; Narro‐Forés, Cristina

doi:10.1108/arla-10-2013-0149

Cited by 4 publications

(1 citation statement)

References 46 publications

(62 reference statements)

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“…This law also stipulates that the directors on the Remuneration Committee must be external and at least two of them must be independents. However, since neither the size of the Remuneration Committee nor the number of proprietary or other external directors on the Remuneration Committee are regulated, differences exist in the configuration of the Remuneration Committees, which could have repercussions for supervision and control functions (Fern andez et al, 2011;Pucheta-Mart ınez and Narro-For es, 2014). Our paper specifically focuses on the role of proprietary directors (representatives of significant shareholders) on the Remuneration Committee.…”

Section: Introductionmentioning

confidence: 99%

The composition of the remuneration committee and the vertical pay gap: the role of proprietary directors in Spain

Fraile

Fradejas

2023

BJM

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PurposeThis study investigates whether the proportion of proprietary directors (blockholders or their representatives) on the board's remuneration committee influences vertical pay inequality in Spanish listed companies and whether this relationship can be conditioned by the concentration of ownership.Design/methodology/approachThe sample contains information on the individual compensation of 1048 directors of 57 Spanish listed firms during the period 2013–2018 making up an unbalanced panel with 3565 observations. Panel data regressions are used to study how the presence of proprietary directors on the remuneration committee influences the remuneration of directors, focusing not on their absolute remuneration levels, but rather on their relationship to the average remuneration of the organization's employees (as a measure of vertical pay inequality within the company). The authors also investigate whether this relationship is conditioned by firm ownership concentration.FindingsThe results indicate that the presence of proprietary directors on the remuneration committee acts as a mechanism to reduce vertical pay inequality, even in the context of high ownership concentration.Originality/valueUnlike the majority of previous research dedicated to the independence of the remuneration committee, this study focuses on the role played by proprietary directors. The results help elucidate the importance of proprietary directors to properly monitor and restrain directors' compensation in contexts of high ownership concentration.

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Section: Introductionmentioning

confidence: 99%

The composition of the remuneration committee and the vertical pay gap: the role of proprietary directors in Spain

Fraile

Fradejas

2023

BJM

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An investigation of the control role and effectiveness of independent non-executive directors in Malaysian public listed companies

Annuar

Rashid

2015

Managerial Auditing Journal

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Purpose – The purpose of this study is to ascertain the control role of independent non-executive directors (INEDs) in Malaysian public listed companies (PLCs), as prescribed in the Malaysian Code on Corporate Governance (MCCG).The MCCG (2000) requires substantive involvement of INEDs on the audit, nomination and remuneration board sub-committees. The study also examines the effectiveness of INEDs in discharging their monitoring roles in these sub-committees. Design/methodology/approach – A qualitative research design consisting of a series of interviews with board members of Malaysian-owned PLCs on the board of Bursa Malaysia was used. Findings – Interviews with 27 company directors reveal that, due to their independence, INEDs are crucial in safeguarding the interests of smaller investors if situations arise in which shareholders’ interests may be threatened. The interviews also disclose that the audit committee possesses the most authority among the sub-committees, as it derives its power not only from the Listing Requirements but also from statute, as well as being involved in areas of the company not traditionally associated with the committee. The study also reveals the differences in opinion between executive directors and INEDs with regard to the extent of INEDs’ effectiveness. Research limitations/implications – This research utilises interviews. Generalisation may be an issue when interviews are used as the method of inquiry. In addition, the sample is not random, as access to many directors is dependent on recommendations. In addition, the respondents have been consciously selected to cover various board positions, including independent and non-independent directors. Practical implications – The findings from this research suggest that INEDs are able to discharge their responsibilities in overseeing the conduct of executives and protecting the interests of investors. In addition, the interviews disclose that the effectiveness of INEDs depends on how non-executive directors view INEDs being on the board. Rather than focusing solely on their control role, INEDS are expected to have a more proactive and progressive role in ensuring sustainable growth and the expansion of the business entity. Originality/value – There are limited studies using qualitative research design in investigating the effectiveness of INEDs in the control role of the board in developing countries. Prior studies were predominantly based upon the experience of Western economies.

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The moderating effect of female directors in the relationship between board characteristics and board remuneration

Bel Oms,

Grau Grau

2024

Corporate Governance: Research and Advanced Practices

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The compensation committee and the remuneration of the directors

Cited by 4 publications

References 46 publications

The composition of the remuneration committee and the vertical pay gap: the role of proprietary directors in Spain

The composition of the remuneration committee and the vertical pay gap: the role of proprietary directors in Spain

An investigation of the control role and effectiveness of independent non-executive directors in Malaysian public listed companies

The moderating effect of female directors in the relationship between board characteristics and board remuneration

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