Europe: directors' remuneration - European Corporate Governance Forum identifies best practice

The European Corporate Governance Forum has published a statement concerning directors' remuneration. The statement sets out the Forum's position on the key elements of best practice with regard to remuneration. The Forum calls for improvements in three areas: the disclosure of directors' remuneration; the process whereby remuneration is set (including the role of remuneration consultants); and the substance of directors' remuneration.

The Forum recommends, inter alia, that non-executive directors should benchmark executive directors' pay with peers but also within the company in order to ensure "a consistent and fair remuneration policy throughout the company". The Forum also recommends that, to the extent possible by law, companies should reserve the right, at the discretion of the non-executive directors, to reclaim performance linked remuneration paid to executive directors on the basis of results subsequently found to have been significantly misstated through wrongdoing or malpractice.