PracticeConsultingBusiness leaders acknowledge pay problem

Business leaders acknowledge pay problem

Problems with board pay have been acknowledged by 84% of those questioned in a new study - and, surprisingly, the respondents were senior business leaders.

Link: Non-executive directors’ pay up by 40%

The research, by executive recruitment firm Russell Reynolds Associates, found the most common problem – cited by 46% of chairmen and CEOs – was an inadequate link between performance and pay.

Other findings included a perceived lack of influence of shareholder voting, compared with a belief in the power of remuneration committees.

Only 40% of chairmen and CEOs said the shareholder vote had a significant impact on company processes, and 20% said it had absolutely no effect whatsoever.

By contrast, 78% of respondents believed remuneration committees worked well, and were a vital weapon in rewarding, and therefore keeping, talented individuals.

Despite recent increases in pay for non executive directors, 79% of respondents said non-executive pay was too low, with many naming £50,000 as an appropriate figure within the FTSE100.

David Shellard, chairman of the Board Practice said: ‘The face-to-face discussions with chairmen, chairmen of remuneration committees and CEOs show that, in spite of extensive recent debate, the UK’s business leaders remain concerned about board pay.’

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