Convention organized by the Jean-Pierre Blumberg Chair on 23 Might
Over the previous couple of years, remuneration in public corporations has obtained appreciable consideration in each educational and public discourse. A number of nationwide and worldwide initiatives have reformed remuneration practices to attain varied goals, together with enhancing shareholder engagement, encouraging energetic monitoring by (impartial) administrators, reaching company sustainability, and incentivising long-term worth creation. Though these tendencies have had a major influence on follow, giant variations in remuneration practices nonetheless exist.
On the afternoon of 23 Might 2024, the Jean-Pierre Blumberg Chair organizes a convention on the subject of “Current tendencies within the remuneration of executives and administrators”. The convention goals to enhance the understanding in Belgium and Europe of the dynamic subject of remuneration of executives and administrators. The convention brings collectively principle and follow by educational displays that include empirical proof on remuneration practices, and thru a panel dialogue of outstanding practitioners (moderated by Charles-Antoine Leunen, Linklaters).
Extra data and registration could be discovered through this link. Beneath follows a quick teaser of what convention individuals could anticipate.
Remuneration of impartial administrators in shares
The Belgian Company Governance Code of 2020 contained a provision that was radically new in Belgium: non-executive administrators (together with impartial administrators) ought to obtain a part of their remuneration in shares of the corporate. A number of years later, it’s protected to say that the availability has not been an amazing success, as many corporations “clarify” why they deviate from it, relatively than comply.
In his presentation on the convention, Pieterjan Heynen (KU Leuven) will talk about the benefits and drawbacks of remunerating impartial administrators in shares, evaluate the Belgian method to the method in different international locations, and supply new empirical proof on which corporations are deviating from the Company Governance Code, and why.
Say-on-pay voting
Belgium has recognized advisory say-on-pay voting on the remuneration report since 2012, and binding say-on-pay voting on the remuneration coverage since 2020, consistent with the EU Shareholder Rights Directive II. A number of years after these authorized initiatives, the query arises: what have shareholders completed with these rights?
Through the convention, Christoph Van Der Elst (Ghent College & Tilburg College) will current new empirical proof on shareholder voting on Belgian remuneration experiences and remuneration insurance policies in recent times, which is able to assist us perceive the influence of say-on-pay voting in Belgian follow.
The long-term construction of govt compensation
An extended-standing debate exists on how company governance can fight short-termism and incentivize long-term worth creation by firms. The Jean-Pierre Blumberg Chair is at present operating an FWO-funded analysis venture on “short-termism in European company governance”. Govt compensation is a vital component of this debate.
Theo Monnens (College of Antwerp) will talk about throughout the convention how govt compensation could be designed to incentive long-term habits. He will even current hand-collected proof on which instruments are used within the compensation of CEOs of Belgian corporations to foster a long-term perspective. Particularly, he’ll analyze which corporations use long-term incentive plans, whether or not CEOs obtain a part of their compensation in shares and whether or not these shares are topic to lock-up durations, whether or not CEOs have to fulfill minimal shareholding necessities, and plenty of different elements that will influence a CEO’s incentive to consider the long run.
ESG targets in govt compensation
Increasingly, corporations usually are not solely fascinated by long-term worth creation for shareholders, but additionally about incorporating “environmental, social and governance” (ESG) elements in company decision-making. This has led to a latest pattern of incorporating ESG targets in govt compensation. This pattern has not been with out controversy, as some have argued (e.g. Bebchuk and Tallarita) that using ESG targets has primarily served the pursuits of executives, relatively than these of stakeholders.
Through the convention, Bettina De Ruyck (Vlerick Enterprise Faculty) will current her analysis on the extent to which shareholders help using ESG targets within the compensation of CEOs of huge European corporations. Her conclusions are nuanced: using ESG targets in CEO compensation is related to larger shareholder approval in say-on-pay votes, however solely when outdoors reviewability (e.g. monetary disclosures and ESG transparency) and inside reviewability (e.g. board independence) are excessive.
Pay complexity
With all of the developments talked about above, it’s unsurprising that govt compensation has turn out to be increasingly more advanced – one thing corporations and stakeholders have been criticizing.
Marthe Van Hove (Vlerick Enterprise Faculty) will current proof on pay complexity in giant European corporations. She will even present how the extent of pay complexity is related to possession and governance traits of corporations, and what the influence is of pay complexity on corporations’ monetary efficiency.
Conclusion
Remuneration of administrators and executives is a subject that has seen many developments just lately, and the convention of 23 Might gathers a number of specialists that may present proof on how these developments have been taking form.
Are you inquisitive about the developments described above? Yow will discover extra data on this website. Registration is free for college kids and teachers, whereas registration for practitioners prices € 100,00 and contains accreditation for the OVB, IBJ, and Compliance Officers of the FSMA.
Tom Vos
Assistant professor, Maastricht College
Visiting professor, Jean-Pierre Blumberg Chair on the College of Antwerp
Legal professional, Linklaters LLP
