- 10 Marks
CSEG – Nov 2015 – L2 – Q2a – Corporate governance framework
Discuss how corporate governance practices impact CEO remuneration and the need to align CEO interests with those of shareholders.
Question
The remuneration of a CEO is usually a major issue for the Board of Directors in their discussions of corporate governance. Recently, the Chief Executive Officer of Unilever Ghana was awarded a significant salary and bonus, which exceeded the market average. This has raised concerns among some shareholders about the alignment of the CEO’s interests with those of the shareholders.
Required:
Discuss how corporate governance practices impact CEO remuneration and explain the need to align the CEO’s interests with those of shareholders. (10 marks)
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