Governance and Legal Challenges of Remuneration Committees in Saudi-listed Companies: A Comparative Analysis With UK Law

Abstract

This research investigates the governance and legal challenges facing remuneration committees in Saudi-listed companies and explores how lessons from the UK can inform reforms. The study adopts a comparative legal approach, combining doctrinal analysis of Saudi laws, such as the Companies Law 2022 and the Corporate Governance Regulations, with an examination of UK frameworks, including the Companies Act 2006 and the UK Corporate Governance Code. Findings reveal that Saudi remuneration committees face limitations in independence, transparency, and linking pay to long-term performance, especially in family-owned firms. In contrast, the UK model demonstrates stronger shareholder engagement, disclosure practices, and committee independence, albeit with the challenges of regulatory burden. The study concludes by recommending phased reforms for Saudi Arabia, including the introduction binding and advisory shareholder votes, enhanced disclosure standards, and the empowering committees to appoint independent consultants. These reforms would strengthen governance, align executive pay with sustainable performance, and build investor confidence.