Directors’ pay proposals questioned

Directors' pay proposals questioned

Increased disclosure is not the panacea for spiralling executive pay. In fact, it could have the opposite effect, warn human resources consultants William M Mercer.

Under new government proposals directors’ pay will be put to an annual shareholder vote.

Responding to the government’s consultation, Simon Patterson, worldwide partner at Mercer, said: ‘Evidence suggests that disclosure can actually ratchet up executive pay deals. The peer comparisons recommended in the Greenbury code have undoubtedly been of most interest to the executives themselves, no doubt fuelling aspirations at the top.’

Patterson added: ‘In practice, such votes will come too late when terms of executive pay and benefits are already written into employment contracts, protected by law.’

Mercer recommends instead that changes to remuneration terms in employment contracts before executives are taken on would be more effective.

Related Articles

New technology advisory services partner at MHA MacIntyre Hudson

People In Practice New technology advisory services partner at MHA MacIntyre Hudson

12h Emma Smith, Managing Editor
35 Under 35 2018: 1-5 revealed!

People In Business 35 Under 35 2018: 1-5 revealed!

1w Emma Smith, Managing Editor
35 Under 35 2018: 6-10 revealed!

People In Business 35 Under 35 2018: 6-10 revealed!

1w Emma Smith, Managing Editor
BDO promotes 14 partners

People In Practice BDO promotes 14 partners

2w Alia Shoaib, Reporter
35 Under 35 2018: 11-15 revealed!

People In Business 35 Under 35 2018: 11-15 revealed!

2w Emma Smith, Managing Editor
35 Under 35 2018: 16-20 revealed!

People In Business 35 Under 35 2018: 16-20 revealed!

2w Emma Smith, Managing Editor
Deloitte promotes 54 partners in UK

People In Practice Deloitte promotes 54 partners in UK

2w Emma Smith, Managing Editor
35 Under 35 2018: 21-25 revealed!

People In Business 35 Under 35 2018: 21-25 revealed!

2w Emma Smith, Managing Editor