Convention organized by the Jean-Pierre Blumberg Chair on 23 Could
Over the previous few years, remuneration in public corporations has acquired appreciable consideration in each tutorial 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 (unbiased) administrators, attaining company sustainability, and incentivising long-term worth creation. Though these traits have had a major affect on observe, massive variations in remuneration practices nonetheless exist.
On the afternoon of 23 Could 2024, the Jean-Pierre Blumberg Chair organizes a convention on the subject of “Current traits 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 concept and observe by means of tutorial shows 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 may be discovered through this hyperlink. Beneath follows a short teaser of what convention individuals might anticipate.
Remuneration of unbiased administrators in shares
The Belgian Company Governance Code of 2020 contained a provision that was radically new in Belgium: non-executive administrators (together with unbiased administrators) ought to obtain a part of their remuneration in shares of the corporate. Just a few years later, it’s protected to say that the supply has not been an awesome success, as many corporations “clarify” why they deviate from it, moderately than comply.
In his presentation on the convention, Pieterjan Heynen (KU Leuven) will talk about the benefits and downsides of remunerating unbiased administrators in shares, evaluate the Belgian strategy to the strategy 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, according to the EU Shareholder Rights Directive II. Just a few years after these authorized initiatives, the query arises: what have shareholders accomplished 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 reviews and remuneration insurance policies in recent times, which can assist us perceive the affect of say-on-pay voting in Belgian observe.
The long-term construction of government 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 working an FWO-funded analysis venture on “short-termism in European company governance”. Govt compensation is a crucial factor of this debate.
Theo Monnens (College of Antwerp) will talk about through the convention how government compensation may be designed to incentive long-term conduct. He may 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 intervals, whether or not CEOs have to fulfill minimal shareholding necessities, and lots of different components that will affect a CEO’s incentive to consider the long run.
ESG targets in government compensation
Increasingly, corporations will not be solely occupied with long-term worth creation for shareholders, but in addition about incorporating “environmental, social and governance” (ESG) components in company decision-making. This has led to a current pattern of incorporating ESG targets in government compensation. This pattern has not been with out controversy, as some have argued (e.g. Bebchuk and Tallarita) that the usage of ESG targets has primarily served the pursuits of executives, moderately than these of stakeholders.
Through the convention, Bettina De Ruyck (Vlerick Enterprise College) will current her analysis on the extent to which shareholders help the usage of ESG targets within the compensation of CEOs of enormous European corporations. Her conclusions are nuanced: the usage of ESG targets in CEO compensation is related to increased 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 government compensation has develop into increasingly more complicated – one thing corporations and stakeholders have been criticizing.
Marthe Van Hove (Vlerick Enterprise College) will current proof on pay complexity in massive European corporations. She may even present how the extent of pay complexity is related to possession and governance traits of corporations, and what the affect 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 Could gathers a number of specialists that can present proof on how these developments have been taking form.
Are you inquisitive about the developments described above? You could find extra data on this web site. 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
