With permission, Madam Speaker, I would like to make a statement about the report of the study group on directors' remuneration, chaired by Sir Richard Greenbury, which was published today. The group was set up in January this year, on the initiative of the Confederation of British Industry, in the wake of public concern about executive remuneration in some public limited companies. The Government supported the setting up of the group and we now welcome the publication of Its report. We congratulate the group on a thorough, speedy and authoritative review of the issues. We welcome its recommendations in principle, and strongly support the emphasis that the group places on the need for pay to be justified by performance. The group's report follows shortly after the report by the Select Committee on Employment on the remuneration of directors and chief executives of privatised utilities.
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A report issued in by a committee under the chairmanship of Sir Richard Greenbury that developed a number of recommendations of the Cadbury Report on directors' remuneration see Cadbury Code. It stressed the importance of a remuneration committee of non-executive directors, the provision of information on remuneration policy in the annual report and accounts, and the restriction of notice and contract periods to less than one year.
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Greenbury Report 1995 (enhanced version)
This Report responds to public and shareholder concerns about Directors' remuneration. The key themes are accountability, responsibility, full disclosure, alignment of Director and shareholder interests, and improved company performance. A group of leading investors and industrialists, meeting under my Chairmanship, has. I wish to thank members of the Group for all the time and wisdom they have contributed and the extent to which they have respected each others' views in reaching our conclusions. Acceptance of the Report's findings will lead to improved corporate remuneration practices. Accordingly the Group invites companies, investors, the Stock Exchange and the Government to implement these proposals. Sir Richard Greenbury.
The Greenbury Report
The Cadbury Report and resulting Code of Best Practice may have succeeded in their aims of providing a model for effective corporate governance and restoring some measure of investor confidence in the running of the UK's public companies, but that was not an end to the matter, rather a beginning. The Cadbury Committee had proposed the establishment of a successor to monitor levels of compliance with its recommendations which were, after all, entirely voluntary. In the event this was but one of many that sought to lay down further guidelines for public and private companies, the most significant of which are the following:. The Greenbury Committee was established in by the Confederation of British Industry in response to growing concern at the level of salaries and bonuses being paid to senior executives. Its key findings were that Remuneration Committees made up of non-executive directors should be responsible for determining the level of executive directors' compensation packages, that there should be full disclosure of each executive's pay package and that shareholders be required to approve them. Remuneration should be linked more explicitly to performance, and set at a level necessary to 'attract, retain and motivate' the top talent without being excessive.
Further corporate governance reports
A report issued in by a committee under the chairmanship of Sir Richard Greenbury that developed a number of recommendations of the Cadbury Report on directors' remuneration see Cadbury Code. It stressed the importance of a remuneration committee of non-executive directors, the provision of information on remuneration policy in the annual report and accounts, and the restriction of notice and contract periods to less than one year. See also Hampel Committee. Subjects: Social sciences — Economics.
The Greenbury Report: key themes summary
The way that the UK deals with issues relating to corporate governance is by setting up committees to look into them. Its main focus was to examine the remuneration of directors in large public companies, and it reported its findings and proposals in July During the s, there were considerable concerns about the remuneration of company directors in the UK, in particular, the ones in privatized utility companies. It was felt that there were excessive pay increases, large gains from share options as well as disproportionate