earningsCity Press reports that the compilers of the King IV code have baulked at giving shareholders the right to block directors’ remuneration.  

The fourth report of the King Committee on Corporate Governance in SA, released last week, does not give shareholders a binding vote in determining executive remuneration.  Chairperson Mervyn King said shareholders were transient, had no responsibility and no liability to the company.  He noted that, on average, shareholders held their shares in listed companies for four to six months and said they “should not be [a] substitute for the remuneration committee of the board.”  He added that if there were a significant number of shareholders who voted against directors’ remuneration, the board should go back and hold discussions with the dissenting shareholders and then disclose the nature of these engagements.  An important introduction in King IV is the principle that the remuneration of executive management should be fair and responsible in the context of overall employee remuneration.

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