The Regulation of Executive Compensation
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The Regulation of Executive Compensation

Greed, Accountability and Say on Pay

Kym Maree Sheehan

Using the model of the regulated remuneration cycle, and drawing upon evidence of its operation from interviews, voting data and remuneration reports from UK and Australian companies, the book demonstrates whether say on pay can operate successfully to both constrain executive greed and ensure accountability exists for company performance and decision-making.
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Chapter 5: UK remuneration practice – best practice?

Kym Maree Sheehan


The annual review encompasses a series of decisions about remuneration: the annual fi xed salary, the STI targets and potential payouts, the LTI grants of share- based payments, and decisions about the previous year’s bonus. Figure 5.1 presents a ‘typical’ annual review, based on interviews with UK remuneration committee representatives and remuneration consultants. The light text boxes represent remuneration consultant input, with the dark boxes representing decisions made by the remuneration committee. As one FTSE100 remuneration committee chair I interviewed noted: the thing I have done . . . is just insisted all of these decisions have got to be made at the start of the fi nancial year. Because you do get an awful lot of drift on remuneration committees and people put off diffi cult decisions. While the remuneration committee’s process has been described by Main et al as validating, calibrating and conforming, it is difficult to fi t the committee’s process within the typical description of the board role as one of ‘performance and conformance’.

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