Acer Inc (宏碁), the world’s No. 4 PC vendor, has revised its remuneration system to strengthen its operational stability and growth, and to reduce the risks that can arise from its payment system for executives, the company said yesterday.
To enhance the remuneration practices for executives at Acer, the board of directors established a compensation committee in August last year and hired consulting firm Towers Watson & Co to help develop executive remuneration guidelines in line with international benchmarking practices, Acer said in a statement.
The new system is aligned with global best practices and it would help the company better retain its talent, Acer chairman J.T. Wang (王振堂) said.
The move came after the departure of former chief executive and president Gianfranco Lanci in March last year, when Acer paid him a severance settlement in accordance with international practices and the terms of his employment contract.
However, soon after Lanci’s departure, the company said it “discovered high channel inventory and disputed accounts receivable in Europe, the Middle East and Africa [EMEA] operations,” which caused a one-time US$150 million write-off and resulted in operational losses.
Acer said that although it took several measures to tackle the losses, including laying off 300 employees and cutting global executives’ bonuses and remuneration last year, it still suffered operational losses for the whole of that year.
In February, Acer filed a lawsuit in a court in Milan, Italy, against Lanci, who had signed a non-compete clause with Acer when he left the firm, but later breached it.
Lanci joined Lenovo Group Ltd (聯想), a competitor of Acer and the world’s second-biggest PC vendor, in September last year as a consultant and was then appointed as that company’s EMEA president and global vice president in April this year.
As a result of these events, Acer said its management team deeply felt the need to further enhance its corporate governance, review its executive remuneration measures and especially take into account Acer shareholders’ long-term interests.
The new system includes appropriate incentive management, along with deferred payments and remuneration clawback mechanisms to prevent executives from taking inappropriate measures to achieve performance goals, Acer said.