I’ve been banging on for a few years about incentives and motivation. It’s been interesting to watch as the common sense that performance-related pay is A Good Thing has lost legitimacy. However even despite the growing awareness of problems with relyi…Read more…
No, don’t leave executive pay to the shareholders
Alex Edmans has a blog on executive pay on HBR here. It’s wrong-headed in my view, so here’s a largely sarcasm and swearing-free response to it.
Politicians typically make two suggestions for pay reform. First, to cap, or at least force the disclosure of, the ratio of CEO pay to median employee…Read more…
Pay ratios: the argument moves Left
After all the pre-billing, the Investment Association’s report on executive pay (issued yesterday) looks a little bit behind the curve. It has already been overtaken by events, with the new Conservative Prime Minister already advocating disclosure of p…Read more…
The slow-moving car crash
Executive pay is like a slow-moving version of MPs’ expenses car crash, but without the degree of self-awareness shown by politicians (who do face a meaningful threat of removal from office). Each year the same headlines, each year the same justifications, each year a bit more legitimacy lost. This…Read more…
Ladbrokes: at it again
Last week Ladbrokes saw a 42% vote against its rem report. This was in response to a termination payment, and the company in turn issued a very solemn statement as part of its AGM results acknowledging the vote.
The Board notes the vote in respect of t…Read more…
Reassuringly bad arguments
I haven’t blogged about the High Pay Centre for quite a while. They have successfully managed to establish themselves as a sort of mirror of the Taxavoiders Alliance, with the same kind of well-evidenced but populist campaigning stance. Which is great …Read more…
Long-termism in executive pay = more pay overall
The news that some companies are sounding out investors about steep increases in base salary in response to longer deferral periods should come as a shock to no-one. Here’s The Grauniad from yesterday:
Some of the UK’s biggest companies are sounding out shareholders about pay rises for their bosses…Read more…
Afren’s remuneration: a long-term problem
A few years back, when I was blogging more regularly, Afren was one of the companies I always used to keep an eye on. This was because it clearly had some governance challenges, not least in respect of directors’ pay.
As far as I am aware it remains t…Read more…
Fidelity "steers away from" own previous views?
Just a quick update, as I noted in a previous post Fidelity says it has “deliberately steered away from” addressing the question of scale/size/amount (or as they say “quantum”) of executive pay.
This hasn’t always been their view. It turns out that Fi…Read more…
Asset manager oversight of exec pay
There’s a very telling quote early on in this piece by Jill Treanor on Fidelity’s views on exec pay.
“If you approach executive pay from the point of quantum, you are setting yourself up to fail,” he said.I think this encapsulates why there will continue to be controversy around exec pay. A lot of…Read more…
A new normal in executive pay
A quick plug for the excellent report by the High Pay Centre on performance-related pay, No Routine Riches. This is the outcome of a year-long project looking at performance pay, and how it can be reformed.
If you read the report you’ll get a sense of…Read more…
Company responses to high shareholder votes against exec pay
As I’ve blogged previously, the new version of the UK Corporate Governance Code requires companies to make a statement in response to large votes against them. This was introduced due to concerns that companies were treating near misses on exec pay vot…Read more…
The richest decide the pay of the richest
There is a great bit of research out today from the TUC on the pay of FTSE100 remuneration committee members. It won’t be any surprise to most people that the executives of FTSE100 companies are amongst the richest in the UK and indeed the world. But w…Read more…
Why exec pay oversight can be weak
Because I’m a geeky person, I often search Investegate for AGM results. I just found this RNS announcement from Diploma PLC from Wednesday –
All of the resolutions put to shareholders at the Annual General Meeting were passed by poll votes and the resu…Read more…