“We believe that it is important for director’s reward to be performance -related. Moreover, we expect excellent performance in both short and the long term. So we calculate bonuses on the annual profits then we have a parallel 3-year scheme which rewards directors if EPS grows by 30% over that period” Comment on above phrase. What is the challenge faced by a company in determining directors’ remuneration.
(a) “We believe that it is important for director’s reward to be performance -related. Moreover, we expect excellent performance in both short and the long term. So we calculate bonuses on the annual profits then we have a parallel 3-year scheme which rewards directors if EPS grows by 30% over that period” Comment on above phrase. What is the challenge faced by a company in determining directors’ remuneration.
b) Mr. Daniel has been a director for Air Hitam Berhad for 5 years. He has not hold any directorship in any other company. He is now 50 years old. Recently, he was charged with corporate fraud. His case is still in the court hearing and yet to be verdicted. However, due to the case, the substantial shareholders of the company which is Valiguard investment group has passed the resolution to remove him from the board of directors. Is the decision valid? Justify your argument.
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