Definition: is the process of compensating both executive and non-executive directors either by paying them a pre-established sum or by allowing the usage of the company’s property as a subject of an agreement between them and the organization. The extent of remuneration can’t surpass the amount formulated in the articles of association, as the board has the right to sue the directors if the latter has exceeded the said amount or took a larger than permitted portion of the profit instead of allocating it as dividends. Additionally, stakeholders have the power to refuse remuneration if they don’t deem the directors worthy of being compensated.
In a Sentence:
Parker understood that the remuneration of directors was hardly possible as they constantly proved to be unable to achieve the long-term interests of the stakeholders.
According to the Corporations Act, every firm is obligated to present all information about the remuneration of directors to the shareholders at the yearly meeting to determine the validity of compensation paid to key personnel.
The remuneration of directors occurred as a result of meeting several performance conditions written in their contracts.
Synonyms and related words: executive director, shareholder, general meeting, appointment of directors, dismissal of directors.