CMA urges listed firms to align remuneration policies with performance

The Capital Market Authority (CMA) called upon listed companies to review their remuneration policies for board members, board committees, and executive management, to include clear criteria aligned with the performance of both the board members and the company.

The authority stressed the need to disclose these criteria and verify their implementation, Al Ekhbariya reported, citing a circular issued by the CMA.

It added that if a remuneration policy does not include the required criteria, companies must take the necessary steps to amend and align the policy with the relevant regulatory requirements.

The CMA also stressed the need for companies to comply with the provisions of the Capital Market Law and the Companies Law and their implementing regulations, as well as other relevant regulations under the authority’s jurisdiction.

Paragraph 1 of Article 76 shall specify the method of remunerating the board of directors. Such remuneration may be a specified amount, an attendance allowance for meetings, in-kind benefits, a certain percentage of net profits, or a combination of two or more of the foregoing. The law may also set a maximum limit for such remuneration. The ordinary general assembly shall determine the amount of such remuneration, provided that it is fair and provides incentives and is commensurate with the director's performance and the company’s performance.

The authority also referred to Paragraph 1 of Article 58 which stipulates that the remuneration committee shall be responsible for preparing a clear policy for the remuneration of the board of directors, board committees and executive management. This is in addition to submitting it to the board of directors for consideration in preparation for its approval by the general assembly, provided that the policy takes into account the adoption of performance-based criteria, its disclosure, and verification of its implementation.

The CMA further noted that Article b/9 of the Implementing Regulations of the Companies Law applicable to listed joint-stock companies, as well as any other relevant statutory provisions, must be taken into consideration and complied with.

According to Argaam data, Article 58 of the Corporate Governance Regulations stipulates that remuneration policies must incorporate performance-related criteria, with companies required to disclose these criteria and ensure they are properly applied.

Meanwhile, Article 59 requires the variable component of remuneration to be linked to long-term performance.

In a special report published in April 2026, Argaam previously reported on the compensation and salaries received by senior executives and board members of Saudi-listed companies in 2025, as part of its periodic analysis tracking compensation, salaries, and benefits awarded by companies listed on the Saudi market.