The battle against egregious executive pay packages is heating up again following last year’s ‘shareholder spring’. Much of the anger is inspired by the new populist mood in the US and the UK. The FT reports that Barclays ‘is proposing to freeze its chief executive Jes Staley’s maximum pay package for the next three years, which amounts to about £8m a year.’ A third of shareholders at travel company Thomas Cook last week refused to support pay plans. Cigarette maker Imperial Brands had to amend remuneration plans in the face of shareholder anger. More pressure is expected from major institutions such as BlackRock, Fidelity International, Aberdeen Asset Management, Standard Life Investments and the Norwegian oil fund. Long term incentive plansare no longer deemed fit for purpose. But while most people would agree there should be no reward for failure, should CEOs also be awarded big bonuses for success that they are paid to achieve anyway? The executive pay debate holds many lessons for corporate leaders. Most importantly, they should consider carefully on what grounds they deserve their packages. Getting this right is not just a PR or governance issue. It goes to the heart of fairness in business.
You may also be interested in...
6 Learning Technology Trends That are Shaping the Future of Work
Digital adoption and cybersecurity are the top challenges for Middle Eastern businesses, survey finds