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Corporate governance rules and principles
Corporate governance rules and principles
Corporate governance rules and principles
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Looking at the financial statement of WH Smith, it can be seen that director's remuneration includes Basic Salary, Benefit, Bonus, Pension entitlements and Share option (WH Smith annual report, 2012). From 2009 until 2012, the profits of WH Smith shown consistent increases not only because of their successful business strategies, but also related to a good remuneration policy. From the remuneration report of WH Smith, it follows The UK Corporate Governance Code (2010) strictly and based on Companies Act 2006, the Large and Medium-Sized Companies and Group, because the remuneration committee received advice from some professional firms and establishes the remuneration policy with several regular meetings. The board of WH Smith consists of seven members in total, which includes 4 non-executive directors and 3 executive directors. Walker Boyd is the chairman of the board and also a non-executive director, which is a member of the remuneration committee since February 2010 after the Robert Walker resignation. The Chief Executive Officer (CEO) of the company is Kate Swann. She joined the board in November 2003 and will step down as Chief Executive on 30 June 2013. Other members of the Board are in charge of different parts of company, but have worked as non-executive and executive not more than 10 years. This kind of composition avoids centralization of power, cliques and power struggles in an organization. In order to avoid breaking the Code and attract, retain and motivate directors, the Committee cooperates with FIT Remuneration Consultants LLP (‘FIT’) and an independent law firm and compile a reasonable remuneration policy. 4.1 Remuneration committee According to UK Corporate Governance Code (2010), it is suggested that listed c... ... middle of paper ... ...ith strong share price and some of them will get the organisation with the worst conditions of company performance. This is when the corporate governance bringing the right direction for organisation making best practice in deciding executive remuneration to sufficiently attract and motivate, eventhough to reach the satisfactory result there is a long way to go, involves time and efforts. The executives' remuneration at WH Smith especially for CEO is considered appropriate because it does not rely on agency theory alone but also considered the guidelines of the UK Corporate Government Code (2010) which is to attract, retain and motivate directors. To support this argument, “high pay itself is not evidence of inefficient contracts but may simply reflect the market for CEOs and the pay necessary to attract, retain, and motivate talented individuals.” (Conyon, M. 2006)
Thiry served as co-chairman on the board for three years and now serves as chairmen (“Board and management”, n.d.). DaVita’s most recent board member has served for five years, the longest has served twenty-one years, and average tenure is eleven years (“Board and management”, n.d.). Board members combined experience includes management and leadership, knowledge of operations, finances and regulations in the healthcare industry, global business issues, operations and regulations, keen and in-depth knowledge of healthcare and the dialysis industries (“Board and management”, n.d). Through the combination of tenure and real-world experience, DaVita’s board offers expansive knowledge of the local and global marketplace will contribute to the sustainability of the business. None of the experience expressly covered environmental concerns, initiatives or expertise. Board members work directly with management to lead the organization in strategic decision making and thinking (Corporate governance, n.d.). Additional responsibilities include representing “the collective interests…stockholders, provide expertise and advice to the CEO, review operational plans and budgets and oversee internal controls over financial reporting” (Corporate governance, n.d.). There was no mention of evaluating management’s
In 2015, Joe Smith was falsely convicted of robbery and battery. In the city of Hickory, North Carolina. Joe was perceived as a robber and a thief he was known for robbing a local grocery store. The case happen on May,2015 at Wal-Mart Express. One slow afternoon ‘Peter’ the cashier was working he had approximately two customers in the building. The customers’ names were Brian and Unknown. Suddenly the ‘Unknown’ customer appeared with a guy pointing at the employee demanding for money. The cashier was stun with shock and disbelief, the nervous employee gave the unknown the cash from the register. The Unknown took the money and ran.. Approximately fifteen minutes later the local Hickory Police arrived. Asking Peter questions about the tragedy.
When a company hires a new Chief Executive Officer (CEO), the company must decide how to compensate the CEO. There are many ways of compensating CEOs, and they all have advantages and disadvantages. These can include things such as salaries, stock options, bonuses, and other benefits. How the company decides to arrange all the things for its CEO can be very crucial to the company’s success. One of the most interesting decision the company must make is whether to give its CEO a golden parachute, and what the company decides to offer as a compensation package, can be one of the most important decision the board of a company makes.
CEO compensation has been a heated debate for many years recently, and it can be argued that they are either overpaid or that there payment is justified by the amount of work they do and their performance. To answer the question about whether CEO compensation is justified it must be looked at by the utilitarian viewpoint where the good of many outweighs the good of one. It is true that many CEO’s are paid an exorbitant amount of money; however, their payment is justified by the amount of money that they bring back to the company and the shareholders. There are many factors that impact the pay that the CEO receives according to Shah et.al CEO compensation relies on more than just the performance of the CEO, there are a number of factors that play a rule in the compensation of the CEO including the fellow people who help govern the corporation (Board of Directors, Audit Committee), the size of the company, and the performance that the CEO accomplishes (2009). In this paper the focus will be on the performace aspect of the CEO.
Board members are the fiduciaries who steer the organization towards a sustainable future by adopting sound, ethical, and legal governance and financial management policies, as well as by making sure the company has adequate resources to advance its mission. More so, it will set policies for the company and goals for leadership; including evaluating the overall performance of the company (Decker, 2016). The goals of the Board of Directors here at Chique Fashion is to insure profitability and encourage Total Quality Management throughout the entire organization. The Board will adopt and monitor quality measures to ensure the company maximizes profits by providing foresight, oversight, and insight. Lastly, it will review the financial strength and decide on the salary scale of the CEO. The board of directors is currently comprised of the following
The Board of Directors is consisted of 11 members: James M. Elliot, the Chairman of the Board, 3 inside members and 7 outside members. The economy is stable and profitable, but that also means a lot of competition in the market. This poses a great opportunity for the company to grow and gain more of the market share. The only foreseeable real threat that the company will face is new competitors in the market.
MANAGEMENT AND GOVERNANCE OF WHITBREAD COMPANY MANAGEMENT AND BOARD The Board of Directors There are 11 members of the Board including the Chairman, Chief Executive and Senior Independent Director. The composition of the Board is shown below. We believe that it is important for the Board to include a diverse range of skills, backgrounds and experiences, to enable a broad evaluation of all matters considered and to contribute to a positive culture of mutual respect and constructive challenge.
As a consequence of the separate legal entity and limited liability doctrines within the UK’s unitary based system, company law had to develop responses to the ‘agency costs’ that arose. The central response is directors’ duties; these are owed by the directors to the company and operate as a counterbalance to the vast scope of powers given to the board. The benefit of the unitary board system is reflected in the efficiency gains it brings, however the disadvantage is clear, the directors may act to further their own interests to the detriment of the company. It is evident within executive remuneration that directors are placed in a stark conflict of interest position in that they may disproportionately reward themselves. The counterbalance to this concern is S175 Companies Act 2006 (CA 2006) this acts to prevent certain conflicts arising and punishes directors who find themselves in this position. Furthermore, there are specific provisions within the CA 2006 that empower third parties such as shareholders to influence directors’ remuneration.
Table of Contents 1.Introduction 2 2. Sources of information 2 3. Providing information to the work team about WHS policies and procedures 3 The Policy Review of the Company 5 4. Implementing and monitoring participation arrangements for managing WHS 5 5.
To accomplish these objectives, the Holland Enterprise will provide a compensation program that establishes and maintains competitive salary levels within the mark...
This paper attempts to summarize a theoretical perspective regarding the research on executive compensation as relates to industry practices, trends, and pay structures for chief executive officers (CEOs) and special groups. Topics discussed will focus on the evolution and transformation of executive pay, internal and external equity
It is the responsibility of the remuneration committee to ensure that the report they create on the remuneration for board directors and senior executives is timely, accurate, complete, and simple to read, understand, and communicate. The committee should create an effective remuneration policy that is in line with the company’s long term strategy. This remuneration policy should then be applied consistently at all levels of employees throughout the company. The remuneration policy that is created should receive an approval from the board of directors and should also be held up for vote at the annual shareholders’ meeting. The policy should be amended as and when the need arises due to changing business circumstances.
Remuneration management is defined as the sum received for an employment or service delivered, this includes the money received on a monthly basis as well as benefits given as rewards (investopedia,para.1 ). Individualism need to be taken into account when implementing these remuneration structures or reward schemes, equal pay plays a role in balancing earnings among the diverse workforce (Shen, Chanda, D’Neetto and Monga,2009,p.241). The Woolworth’s Holdings uphold remuneration policies which have the purpose of making sure to attract and hold on to the best talent, that they are congruent with the strategies of the company and are the determinants of performance during the short and long phases. The policy considers the board members and the employees. This policy manages employees of the company by giving...
The main intention of this essay is to discuss whether the wage earners and the salaried workers are paid according to market value, state edict, or the operational needs of the business and so forth. Indeed, Roberts (1972) implied that the labour cost associated with the pay matters can be the factors to pay determination, such as, affected to the legal regulations and political environments in specific nation, the dimensions view of labour forces and the decisions of the organization in top management.
The total pay package has a direct impact on the successful recruitment, selection and the retention of staff within any organization. This pay package is critical for any business to remain competitive in today’s business world. Competitive compensation packages are vital to both large and small organizations as they encourage the retention of talented staff.