The Greenbury Committee was established in 1994 by the Confederation of British Industry in response to growing concern at the level of salaries and bonuses being paid to senior executives.
Its key findings were that Remuneration Committees made up of non-executive directors should be responsible for determining the level of executive directors' compensation packages, that there should be full disclosure of each executive's pay package and that shareholders be required to approve them. Remuneration should be linked more explicitly to performance, and set at a level necessary to 'attract, retain and motivate' the top talent without being excessive. It also proposed that more restraint be shown in awarding compensation to outgoing Chief Executives, especially that their performance and reasons for departing be taken into account.
Again this code of conduct was to be voluntary in the hope that self-regulation would be sufficient to correct things. It was judged that shareholders were not so much concerned with exorbitant amounts being paid out to executives than that the payouts be more closely tied to performance.
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