Question:
Remuneration report
As discussed by Grosse, Kean and Scott, (2017), remuneration report is defined as the type of report which considers the statistical comparison of the salaries of the highest paid person in a business organization with the average pay of the lowest paid 10% workers of the organization.
This paper will be focussing on the remuneration report of Virgin Australia which is one of the biggest aviation industries in the Australian market (Faghani, Monem and Ng 2015). The organization faced few financial difficulties during 2011 as there was a couple of changes in the structure of the organization (Harpur and Pachana 2017). The transformational change had an impact on the business of this 2nd biggest aviation industry in Australia.
Answer:
Remuneration Report of Virgin Australia
Considers the statistical comparison of the salaries of the highest paid person in a business organization
Helps in Maintaining financial transparency
Aids in better understanding of the roles of the stakeholders
Helps in better understanding of the market situation
The remuneration helps in forming the strategic objectives of the organization
Detailed assessment of taxation
Risk categories addressed in the remuneration report
Helps the organization in categorizing risk such as foreign exchange risks, liquidity risks and the interest rate risks
Helps in estimating the fair values of assets in an organization
Estimation of Risk pertaining to the transformational changes
Remuneration Philosophy
Goals of CEO
Effective remuneration governance for CEO, executives and the non-executive directors of Virgin Australia
Growth and development of the organization
Better understanding of the trading policies
Considering the taxation, equity, controlling and non-controlling interests and other foreign exchange capital
Providing short-term incentive to executives with more than one year experience
Experience and skill is given importance in fixed remuneration
Long-term incentive is provided to executives with three years of experience with the company
Remuneration Mix
Goals of Chairman
Improve the existing financial performance of all the stakeholders associated with this aviation corporation
Encouraging advanced business transformational program
Leasing out the regional jets
Clear the debts of this corporation which was about $2.4 billion at the end of the year 2017
Performance measurement for Short-term incentives (STI)
Summary of Remuneration Components
