Discuss the relevant issues which surround Directors' Remuneration Essay

Discuss the relevant issues which surround Directors' Remuneration Packages and actions which have been taken to solve these issues of contention - Essay Example ty has been demanding for institutional investors to support an autonomous call for companies to either reconsider the payment of top level management or face harsh actions on the corporate governance policy by the government. Thus, the definition of directors’ remuneration has emerged as a major issue of academic interest which is the objective of the study (Prasanna, 2005). Correspondingly, the issues discussed within this study include regular increase of directors’ remuneration as compared to the stagnant pay scale of the workers. It also oversees at the situation where directors’ remuneration has been continuously increasing even when the company is suffering losses. The study also delineates the actions that have been taken to solve these issues which include enhanced transparency of directors’ remuneration in the financial data provided by the company. In the recent years, it has been observed that the shareholders, workers, general public and the media have increased their concerns relating to the remuneration packages paid to the directors. This issue involves poorly organised remuneration report which fails to exactly demonstrate the linkage between the pay and the performance, inappropriate transparency of the companies to report the remuneration package and excessive payments for exit of director’s who depart from the company. In addition, the issues also surround the changes in the structure and level of the directors’ remuneration from the last era which has been ever-increasing irrespective of the company’s size and performance. Director’s remuneration issues often arise due to the market failure that occurs in the heart of corporate governance system. Moreover, shareholders do not maintain any control on the director’s pay which increases the possibility of director’s pursuing a s trategy that would reward them personally instead of contributing to the company’s long-term value (Crown, 2012). It also has been observed that due