Nomination and Remuneration Committee
A board committee responsible for recommending director appointments and setting executive pay policy.
How it is identified
Test: the committee consists of non-executive directors with a majority independent, and an independent chair
Unit
qualitative
In depth
The committee's purpose is to prevent executives from setting their own pay and to bring some independence to board appointments, which in promoter-controlled companies is where the constraint is weakest. Remuneration policy and the ratio of directors' pay to median employee pay must be disclosed in the annual report, which makes comparison across companies possible. The substantive question is whether pay is linked to performance measures that shareholders would recognise as value creation, or to revenue and size, which reward growth for its own sake. Managerial remuneration above statutory limits requires shareholder approval by special resolution.
Worked example
An annual report discloses a managing director's remuneration at 246 times the median employee's. Whether that is justified is a judgement; the disclosure requirement exists so shareholders can make it.
Illustrative figures, chosen so the arithmetic is easy to follow. Not a live price and not a valuation of any company.
Educational reference only
This entry explains what “Nomination and Remuneration Committee” means. It is not investment advice and not a recommendation to buy or sell any security. Any numbers above are illustrative, not live prices, and nothing here predicts price direction or rates a stock. Consider your own circumstances and consult a SEBI-registered investment adviser before acting.