Business leaders acknowledge pay problem

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.’

Related reading

Theresa May 1