Directors' remuneration is the subject of a publication by the EU on the 6 October 2004. Here the European Commission has published a Recommendation on directors' remuneration. It recommends that Member States should ensure listed companies disclose their policy on directors' remuneration and tell shareholders how much individual directors are earning and in what form, and ensure shareholders are given adequate control over these matters and over share-based remuneration schemes?

The non- binding Recommendation on directors' remuneration invites Member States to adopt measures in four areas:

• Remuneration Policy : all listed companies should release a statement of their policy on directors' remuneration for the following year. It should include information on the breakdown of fixed and variable remuneration, on performance criteria and on the parameters for annual bonus schemes or non-cash benefits. It should also explain the company's contract policy. The company should not have to disclose commercially-sensitive information.
• Shareholders meeting : remuneration policy for directors should be on the agenda of the shareholders' general meeting. To increase accountability, it should be submitted to a vote which may be either binding or advisory. An advisory vote would require neither directors' contractual entitlement or remuneration policy to be amended.
• Disclosure of the remuneration of individual directors : this should include detailed information about: the remuneration and/or emoluments of individual directors; the shares or rights to share options granted to them; their contribution to supplementary pension schemes; and any loans, advances or guarantees to each director.
• Approval of share and share option schemes : variable remuneration schemes under which directors are paid in shares, share options or any other right to acquire shares should be subject to prior approval of the Annual General Meeting of Shareholders. The approval relates to the system of remuneration and the rules applied to establish individual remuneration under the scheme. It would not relate to the individual remuneration of directors.

The Recommendation takes due account of efforts already made by several Member States and aims to foster these developments by identifying best practices to ensure greater convergence in the EU. The Commission will closely monitor the application of the Recommendation to identify whether additional measures may be desirable in the medium term.

 Some of the graphics on the website http://www.metaphorbusinessgraphics.com in the Corporate Governance section, address the concept of directors' pay.

UNICE ( http://www.unice.org/Content/Default.asp) in their submission to the EU Commission , before the publication of the recommendation on directors' remuneration, complained in a letter to Commission President Romano Prodi complained about the content of the then proposed recommendations and the process which led to their genesis. The Financial Times,http://news.ft.com/home/uk in an article in their 24 th September edition , under the title of Tobias Buck in Brussels, said that though ot legally binding, businesses fear that the EU recommendations on directors' remunerationwill form the basis for a future European Corporate Governance Code to replace national ( indiviual states) regimes.