The board should make sure that remuneration is driven by long-lasting value creation and aligns CEO and shareholder passions

The board should make sure that remuneration is driven by long-lasting value creation and aligns CEO and shareholder passions

Norges Bank Investment Management place

  1. A considerable percentage of total yearly remuneration should be supplied as stocks which are locked set for at the least five and ideally a decade, no matter resignation or retirement.
  2. The board should develop pay methods which can be simple and easy don’t put undue stress on corporate governance. Allotted stocks must not have performance conditions in addition to complex requirements that may or might not align with all the company’s aims.
  3. The board should offer transparency on total remuneration to prevent outcomes that are unacceptable. CEO remuneration must certanly be determined and settled in cash and locked-in shares each 12 months. The board also needs to disclose a roof for total remuneration for the year that is coming.
  4. The board should make sure that all advantages have clear company rationale. Pensionable earnings should represent a small section of total remuneration. The board should agree to maybe maybe maybe not offering any end-of-employment plans that effortlessly shorten or dilute the lock-in of stocks.

Arguments for the positioning

Long-term shareholding better aligns CEO and shareholder passions

Needing the CEO to take a position a part that is meaningful of or her remuneration in business stocks is just a easy and clear method of aligning the passions associated with the CEO with those of investors as well as the wider culture. 继续阅读“The board should make sure that remuneration is driven by long-lasting value creation and aligns CEO and shareholder passions”