Overview of a Terms of Reference for the Remuneration Committee
Importantly, the remuneration committee can also be known as a compensation committee. Typically, one is formed from the Board of Directors to guide the board in director and executive compensation matters. As well as succession planning, and recruitment. Essentially, the Terms of Reference for the Remuneration Committee sets out the guidelines for the committee.
Firstly, a good term of reference is essential to corporate governance. This is because it drives behavior and proper incentives to both the board and to the parties affected by compensation decisions.
In this document, we lay out the basic duties of a remuneration committee along with key points that need to be tailored and addressed for an effective committee.
What is in the Terms of Reference for the Remuneration Committee?
Purpose of the Committee. The document must lay out the key purpose of the committee and the authority provided by the board.
Membership. The terms of reference must outline the membership of this committee. Additionally, this includes who will be the chairperson (the person convening the meeting). Also, the members that must be involved. Membership includes the number of members as well as how they will be appointed or removed from the committee.
Meeting Proceedings. Notably, the terms of reference must also detail the frequency in which meetings will be held
When Should You Use a Terms of Reference for the Remuneration Committee?
The Terms of Reference for the Remuneration Committee is a key part of corporate governance outlining the composition of the remuneration committee and the responsibilities of the committee.
A Zegal template can help you get started in establishing good corporate governance. As with all templates, you can tailor this to customize to your needs and that of your organization’s.
You Might Also Like
Along with this document, make sure you see these other templates in our library:
- Shareholder Agreement
- Option Agreement
- Employee Option Repurchase Agreement
- Share Appreciation Rights Plan
- Share Option Plan
The Zegal Template Library
Zegal's template library represents a complete and curated list of essential and premium business templates that can be used directly, for everyday business needs. Importantly, whether you're a startup or a larger enterprise, you will find that our Zegal automation solution allows anyone to create a legal agreement, any time, anywhere. All without a need for an expensive lawyer. Why do we do this? Well, we think that running your business day-to-day is important, and having these templates at your fingertips allows you to not miss a beat!
Lawyers draft and curate all of our legal templates for ease of understanding using plain English. Just fill out our guided questionnaires, and we will create the contract for you. Using our patent-pending expert rules engine, we automate the creation of complex legal contracts.
Try it for free today!