The remuneration committee adviser
Produced in partnership with Ruth Bender of Cranfield School of Management
The remuneration committee adviser

The following Corporate practice note produced in partnership with Ruth Bender of Cranfield School of Management provides comprehensive and up to date legal information covering:

  • The remuneration committee adviser
  • Requirement for a remuneration committee adviser
  • Selecting and employing external advisers
  • Role of the remuneration committee adviser
  • Internal advisers
  • External advisers
  • Remuneration adviser independence and conflicts of interest
  • The remuneration consultants group and the code of conduct
  • Disclosures regarding advisers to the remuneration committee

The remuneration committee adviser

The UK Corporate Governance Code (UKCG Code) recommends that companies with a premium listing of equity shares in the UK establish a remuneration committee with delegated responsibility for determining the policy for executive director remuneration and setting remuneration for the chair, executive directors and senior management. Other quoted companies generally adopt similar structures to determine executive pay. Many remuneration committees choose to consult with internal and/or external advisers on the structure and quantum of remuneration for executive directors and chairs.

Requirement for a remuneration committee adviser

The UKCG Code states that the procedure for developing policy on executive remuneration and determining director and senior management remuneration should be ‘formal and transparent’. There is no legal or regulatory requirement for remuneration committees to engage an adviser, although it is common practice for them to do so and the UKCG acknowledges that companies may choose to do so. Where this is the case, the remuneration committee should be responsible for the appointment of the adviser.

Advisers can be internal to the company, or external appointments. Internal advisers could include the company secretary, an internal HR or compensation manager, or other employees. External advisers are generally specialist executive remuneration consultants, but could also include other professionals, eg lawyers, accountants or actuaries.

If advisers are used, there is no formal requirement as to who can act as an adviser,

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