As a shareholder of any company, I truly believe that key management should be fairly rewarded and well compensated when they perform well in their roles. But I have an issue if they reward themselves excessively – especially if they underperform in their roles and the company is doing badly. This is a red flag that tells the management is not aligned with shareholders’ interests and they care more about their fancy pay packages regardless of how the company is performing.
If you ever need to check how much a company’s CEO and directors are paid, you can always check the company’s annual report. Most regulators in their respective exchanges require directors’ remuneration to be disclosed publicly.
How does a company decide how much to pay its key management?
To be as impartial as possible, a remuneration committee, made up of independent directors, approve the remuneration packages (remuneration is not ...
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