Compensation Committee
Executive compensation arrangements should be structured and executed in full compliance with applicable laws and regulations and a culture of compliance should be adopted to guide a company’s pay policies and practices.
Executive compensation arrangements should be approved by the Board of Directors’ independent and active Compensation Committee that is guided by high corporate governance standards, implemented through a well-defined charter and informed by independent advisors. MCCA will help the compensation committee by educating the committee on all aspects related to compensation and regulatory responsibilities.
The Board's compensation committee should:
- Employ Sound Corporate Governance Practices. Leading corporate governance practices help ensure that all elements of compensation are carefully reviewed and appropriately structured.
- Use Independent Compensation Advisors. Outside advisors retained by the compensation committee should not provide other services that create an actual or perceived conflict of interest with the executive pay advice provided.
- Conduct Periodic, Independent Competitive Compensation Reviews. A thorough periodic assessment of the company’s executive compensation programs and practices helps to reinforce sound governance and appropriate compensation design.
- Evaluate Committee Regularly. Committee member evaluation helps ensure the committee acts consistent with its charter thus reinforcing accountability.
- The compensation committee should ensure that the company’s executive compensation program is disclosed in a clear and understandable manner and ensure that the company is accessible to explain the program to shareholders and other stakeholders.
- Provide Clear, Concise, Customized Disclosure. Executive compensation arrangements should be disclosed and explained in a clear, concise and customized manner that facilitates a full understanding of the rationale for and levels of all aspects of reportable executive compensation.
- Be Accessible. Designated company executives and/or directors should be accessible to discuss and respond to inquiries about the company’s executive compensation policies and practices with its shareholders and other corporate stakeholders.