On March 12, 2009, Belgium’s Corporate Governance Committee published its new Code on Corporate Governance. The Code includes a cap on severance pay for CEOs and other senior executives that will come into effect for all contractual arrangements made on or after July 1, 2009.
Key Details
The main points of the Code on compensation include the following:
* Severance pay to top executives should not exceed 12 months’ fixed salary. This will increase to 15 months’ salary if the person has worked for the company for more than 20 years, and 18 months’ salary if the person has worked for the company for more than 25 years.
* Every Annual Report must include a remuneration report that discloses the total compensation and any benefits, including severance pay, for senior executives. Any deviations from stated remuneration policy during the year should also be explained in this report.
* The basic remuneration component must be calculated based on only the last month worked, and the remainder (the variable component) can be determined by contract, and may be consistent with the previous year’s variable remuneration.
See full Article.
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