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Directors' Remuneration and Benefits-Chapter 9

Elsevier Ltd
DOI: 10.1016/b978-075068419-4.50014-0
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Publisher Summary One particular aspect of directors' remuneration that was the subject of considerable debate in the early part of this decade related to the pros and cons of share options and accounting treatment. Share options can be a powerful mechanism for aligning the interests of management and staff with those of shareholders and most large public companies have schemes in place. However some would argue that due to the volatility of stock markets and the good or bad fortune of the timing of grant and exercise dates, the alignment of reward and genuine performance in public companies is seldom perfect and often arbitrary. The Combined Code has a number of provisions relating to Remuneration policy and also contains a schedule of provisions (A), which relate to the design of performance-related remuneration and refer to share-based incentives. With respect to accounting for share options, the main international accounting standard relating to share options and share option schemes is International Financial Reporting Standard 2.

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