Executive pay has reached “unwarranted” levels due to long-term pay plans, warns the High Pay Centre.
Long-term pay plans should be abolished, according to a UK think-tank which argues the arrangements have driven up executive pay to “unwarranted” levels without a corresponding increase in performance.
The High Pay Centre makes the claim after a year-long study. The centre’s founding director, Deborah Hargreaves, said: “Performance-related pay has failed on its own terms. It does not encourage or reward good business performance. The only effect it has is to make executive pay packages more complex, less aligned with the interests of the company and much, much bigger.
“This has become a real threat to public trust in business.
For thoughtful journalism, expert insights on corporate governance and an extensive library of reports, guides and tools to help boards and directors navigate the complexities of their roles, subscribe to Board Agenda