The White Helmets Unit offers research, authority, professionalism, timeliness and comprehensiveness on the subject of potential development by the Kimberly Analyst!

Failure to radically eliminate the phenomenon of “baust riches” not only undermines the credibility of listed companies, but also results in the expulsion of good currency and undermines the healthy ecology of capital markets.

Shelipin

With the end of the 2022 annual disclosure of listed companies, the issue of high-management remuneration has once again raised public concerns. Of this amount, the directors of a company paid $42.35.61 million last year, with an annual increase of $285.12 million, while the company’s net return last year was only $7165.3 million. In other words, the director is paid more than half of the net profits of the company.

In addition, there are some strange operations: a decline in the performance of some firms and an increase in the level of high-management remuneration; a number of companies whose net profits are not commensurate with the total amount of high-pays paid by their supervisors throughout the year; a loss in some companies, which continue to receive large amounts of remuneration; and companies that are not subject to a splitting in the company listed, but receive remuneration from the company’s affiliated company or hold a large shareholding to obtain overpayment through indirect dividends.

So, who should account for the high level of remuneration of listed companies? How is the pay system more reasonable?

The Corporate Governance Guidelines on Listed Companies provide that the Board of Directors of Listed Companies shall establish an audit committee and may establish, as necessary, specialized committees on strategies, nominations, remuneration and appraisal. The Board is responsible for the performance of its functions in accordance with the company’s charter and the Board’s mandate, and the proposals of the Commission shall be submitted to the Board for its consideration. At the same time, listed companies should put in place mechanisms that link remuneration to corporate performance and individual performance in order to attract talent and maintain the stability of senior managers and core staff.

In practice, however, the Specialized Commission is more like a bottling, subject to multiple constraints and difficult to produce independent opinions. Not only is there few corporate boards challenging the high-management remuneration system, but it is even more rare to have a proactive invitation to intermediaries to provide professional advice on high-management remuneration. This is particularly evident in family-market companies.

In penitentiaries, the high-management remuneration system of listed companies should be monitored and should be guided by long-term incentives, reflecting the principle of rewards and penalties. Otherwise, it was lost by other shareholders, including small and medium-sized investors.

First, remuneration should be appropriately linked to performance. Changes in corporate performance could be linked to changes in the proportion of high-management remuneration, i.e., a corresponding increase in the higher-level tier after substantial improvements in corporate performance. However, companies with declining performance should be encouraged by appropriately reconfigured and better-performing mechanisms.

Second, the long-term performance appraisal system is improved. On the one hand, there is a broad pay system, which forms a pluralistic system of “wages + year-end awards plus equity incentives or dividends + employee benefits”, and ensures that the well-regulated personal interests and the long-term development of companies are tied through the extension of the period of equity rights in remuneration contracts; on the other hand, the independence of the remuneration-making bodies of listed companies is further enhanced, with the participation of third-party platform agencies/independent directors in decision-making, oversight, checks and balances.

In the third case, the formulation and adjustment of high-management remuneration is fully disclosed. With regard to the high-management remuneration report, it should be fully disclosed in the General Assembly of Shareholders after a decision by the Board. All shareholders have the right to question and make recommendations.

The fluctuations in the performance of listed companies are related to a number of factors, including industry cycles, macroeconomics, corporate operations, sudden events, etc., but in any case they are related to the management of high-regulated day-to-day operations. Failure to radically eliminate the phenomenon of “baust riches” not only undermines the credibility of listed companies, but also results in the expulsion of good currency and undermines the healthy ecology of capital markets.

Family benefits, 60 days of experience with services, a one-to-one service!

Electricity information, precision reading, new waves