Decrease in CEO pay variation blamed on ‘reciprocal benchmarking’
Chief executive pay deals in the US have begun to cluster around the same levels regardless of the size or profitability of the firms involved.
Image: MJgraphics/Shutterstock
Attention around executive remuneration is usually focused on rocketing pay deals. Now researchers have unearthed a new phenomenon in the US: a dramatic fall in variation.
Academics from the Netherlands and Spain looked at 5,000 US companies over the past decade finding that chief executive pay deals have begun to cluster around the same levels regardless of the size or profitability of the firms involved.
The news comes as executive pay deals continue to be a bone of contention between boards and investors. Some executives took pay cuts during the pandemic while others did not. Recent research has revealed investors now want to see pay
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
Related Stories
-
Fund managers warn over exec pay
Investment Association calls for pay-ratio disclosure among FTSE 350 in a bid to foster greater simplicity and flexibility of pay structures.
-
Nissan’s governance report is a warning for all boards
The special committee's investigation into governance issues highlighted by the Carlos Ghosn affair reveals a corporate culture that allowed the "concentration of authority" in the CEO and a board that felt unable to ask the necessary questions.
-
Boards fail to talk risk
Deloitte research reveals financial firms could do more on risk.
