KCGS 한국ESG기준원

- Directors’ compensation is an important corporate governance mechanism that provides incentives for directors to make business judgments that are aligned with shareholders’ interests and thereby reduces the agency problem.

- Severance pay and stock options are a form of compensation for directors. In some cases, however, a poor design weakens the effect of having such compensation schemes.

- Publicly traded companies need to be proactive in examining whether their compensation plans work as an effective incentive mechanism.