Directors fail to tackle pay concerns
Company directors are failing to address concerns over executive remuneration policies.
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Despite increased reporting requirements since last year, only a handful of executives questioned by the Institute of Directors said they expected the regime to result in any ‘material’ change to their company’s policy on executives’ notice periods, share options or incentive plans.
Just one in three of the FTSE-100 and FTSE-350 directors questioned said their company was likely to impose stricter performance criteria on directors in these areas.
IoD employment partner Simon Jeffreys said few directors were discussing remuneration packages with institutions. He added: ‘The responses indicate that companies still think remuneration is primarily a matter for the board and not for shareholders and perhaps that a negative advisory vote is not much feared.’
But Patricia Peter, head of the Corporate Governance Executive, said that this indicated company chiefs were satisfied their shareholders were happy with existing procedures.
‘The survey reflects the numbers of companies that have reported and whose shareholders are happy with their policies,’ she said.