Directors’ Remuneration and Corporate Governance within the UK

Abstract

In this era of globalization and rapid growth of world economy size of directors' remuneration is a matter of international debate. Current anxieties are around the increase in executive pay as reports disclose that executive pay no longer corresponds with performance and the gap of wealth have widened since the 1980s. The courts, nevertheless, has been reluctant to scrutinise this condition, neither has the legislature shown any interest to fix any standard of pay. Model Articles for Public Companies allow the board of directors to delegate their powers on conditions they seem fit. Compared the pay of CEOs of companies of Japan, Germany and UK with the USA and found that USA and UK were closest with their generous pay. This comparison is important since the UK and the USA have been taking serious techniques to prevent extra pay. This paper will discuss about the issues with remuneration highlighting the legal control of director's remuneration and the flaws of regulations from different viewpoints of shareholder, executive and company along with social and economic the factors that increases director's remuneration.

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“…Directors' remuneration has a tight relationship with the issue of corporate governance. In addition to being fair and in line with the success of the business, it should be appealing enough to attract and retain qualified directors [4,95]. Directors' remuneration consists of various remuneration packages.…”