Conflict of Interest in Director Remuneration by Remuneration Committee in Family Firm
Dr. Syaiful Baharee Jaafaar, Prof. Dr. Kieran James

Abstract
This study focuses on conflict of interest of remuneration committee during the remuneration process in family firm. The remuneration committee role is to monitor director remuneration in order to ensure the incentive is linked with board skills, knowledge and experience. The presence of the non-executive director as a majority member on the board of directors and remuneration committee may influence the remuneration process. The remuneration committee is responsible for ensuring the remuneration is able to motivate the board to enhance performance. However, the remuneration committee has a conflict of interest with links between remuneration and performance in a family firm. Family executives tend to manipulate power and control to increase their remuneration for personal interest. As a result, increasing remuneration by a family executive without enhanced performance will affect minority shareholders wealth.

Full Text: PDF

Copyright © 2014: www.aijcrnet.com. All Rights Reserved.