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Saudi Arabia's Capital Market Authority (CMA) has issued a directive urging listed companies on Tadawul to review and refine their remuneration policies for board members, committees, and senior executives. The regulatory body emphasized that reward structures must incorporate clear, objective criteria directly tied to the financial and operational performance of both the individual leadership and the company as a whole.
This regulatory push aligns with Vision 2030 goals to elevate corporate governance, transparency, and investor protection in the Kingdom's financial markets. By enforcing a tighter link between executive compensation and actual corporate performance, the CMA aims to eliminate misalignment of interests and curb excessive payouts during period of underperformance, thereby enhancing shareholder value.
For regional investors and institutional asset managers, tighter governance rules increase confidence in the Saudi equity market, attracting more foreign direct investment. Market participants will watch how listed entities update their internal governance frameworks in upcoming annual general meetings and transparency reports.
