CS Professional · Environmental, Social and Governance (ESG) - Principles and Practice · Stakeholders Rights
Sagar Pharma Ltd's NRC is framing a remuneration policy for directors, KMP and senior management. Which feature must the policy ensure under Section 178(4)?
The policy must ensure that remuneration of directors, key managerial personnel and senior management balances fixed and incentive pay, reflecting both short-term and long-term performance objectives suited to the company and its goals. Wholly fixed pay or pay tied only to one year's profit does not meet this requirement.
- ARemuneration is wholly fixed so that it is independent of performance
- BRemuneration is fixed by the promoters and ratified by the NRC afterwards
- CA balance between fixed and incentive pay reflecting short and long-term performance objectivesCorrect
- DIncentive pay linked only to the current year's profit
Explanation
Section 178(4)(c) requires a balance between fixed and incentive pay reflecting short and long-term performance objectives. Section 178(4)(b) also needs a clear link between pay and performance, so wholly fixed pay and purely annual incentives fall short.
Did you get it right without looking?
One question tells you little. A timed set on Stakeholders Rights shows your real accuracy, how long you take and where you lose marks.
More Stakeholders Rights questions
- Kaveri Textiles Ltd, a listed company, has 420 employees and 6 directors. Its board proposes to skip a vigil mechanism because 'no employee …
- Meenakshi Foods Ltd, a listed company, has adopted a whistle-blower policy but has kept it only in an internal circular. The company has a w…
- Tarun Engineering Ltd, a listed company, has 1,500 shareholders. Shareholders' grievances remain unresolved though the Stakeholders Relation…
- Mr. Iyer, a shareholder of Orbit Foods Ltd (listed), wants to propose Ms. Nair, a non-retiring person, as a director at the AGM but has not …
- Godavari Pharma Ltd has 1,200 security holders. Its Stakeholders Relationship Committee chairperson, Ms. Iyer, a non-executive director, is …
- Under Section 178(6) of the Companies Act, 2013, what is the function of the Stakeholders Relationship Committee?