Remuneration Committee
A board subcommittee that sets executive pay, equivalent to the compensation committee in UK and international governance.
What is Remuneration Committee?
The remuneration committee is a board subcommittee responsible for setting and overseeing executive compensation, performing the same governance role in UK and international corporate frameworks as the compensation committee in the United States. Under the UK Corporate Governance Code, the remuneration committee must consist entirely of independent non-executive directors and must produce a Directors' Remuneration Report, which is subject to a binding shareholder vote on the pay policy (at least every three years) and an advisory annual vote on the implementation report. The committee sets base salary, annual bonus structures, and long-term incentive plan (LTIP) awards, and typically engages an independent remuneration consultant.
Example
HSBC's Remuneration Committee published its Directors' Remuneration Report in the 2023 annual report, detailing Group CEO Noel Quinn's total pay of approximately £10.6 million, including fixed pay, annual bonus, and long-term incentive vesting. The report was subject to an advisory shareholder vote at the 2024 AGM under UK corporate governance requirements.