The European Commission has issued a press release stating that it has adopted a Recommendation on the regime for the remuneration of directors of listed companies, complementing previous Recommendations 2004/913/EC and 2005/162/EC. The Commission has also published frequently asked questions on the Recommendation.
An appropriate remuneration policy should ensure pay for performance and stimulate directors to ensure the medium and long term sustainability of the company. The existing Recommendation on directors' remuneration is based on the idea of pay for performance through disclosure of the remuneration policy. The new Recommendation will give further guidance on achieving this by setting out best practices for the design of an appropriate remuneration policy. To this end, it focuses on certain aspects of the structure of directors' remuneration and the process of determining directors´ remuneration, including shareholder supervision.
View Recommendation on directors' remuneration: FAQs, 29 April 2009