Performance and Remuneration of Company Directors - Legal approaches in Germany, the EU, and the U.S. -
Performance and Remuneration of Company Directors - Legal approaches in Germany, the EU, and the U.S. -

Summary/Abstract: Fundamental changes in the global economy have led to pronounced changes in executive remuneration practices worldwide. Remuneration for company directors has increased dramatically and has become a stumbling block. Various legal approaches have been developed to prevent excesses with regard to executive compensation. While in the past a material assessment of what is reasonable compensation was deemed to be viable and appropriate, recent developments – especially high profile law proceedings – hint at the opposite. Thus, the regulatory focus has increasingly shifted to the pay-setting process. Moreover, recent developments in legislation demonstrate the preference of the law-makers for disclosure obligations. While all of these approaches have their advantages and disadvantages, establishing procedural requirements for the pay-setting process and introducing sophisticated disclosure rules are the “globalized” answer addressing the pronounced changes in executive remuneration practices.

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