Sterling progress?

UK chief executive pay is growing at a rate faster than US counterparts, according to research from ISS.

Reported in the Financial Times, the ISS report shows median pay for CEOs at FTSE 100 companies increased 11% in the current years, outpacing the 7.5% of US corporate leaders.

While median UK pay for CEOs is now $6.5m, it remains much higher in the US at $16m.

Despite the disparity, Luke Hildyard, director of the High Pay Centre, a think tank, tells the FT: “It appears that the campaign by big business and the finance lobby for higher CEO pay awards is persuading a lot of shareholders.” Yes indeed.

Male, pale and stale

The UK’s FTSE 100 is placed eleventh in the world for the proportion of women in the top role of chief executive, according to a report from consultancy Heidrick & Struggles.

Only 9% of FTSE 100 CEOs are women, while Singapore registers 17% and Australian/New Zealand 16%. Major European countries ahead of the UK include Portugal on 13%, Norway on 12%, and Belgium and France, which both have 10%.

The news comes in Heidrick’s Route to the Top 2025 looking at CEOs around the world.

The report also finds that, globally, CEOs are improving their education, with 65% now having advanced degrees, compared with 58% in 2019.

But the US dominates the grey-hair stakes, with fewer CEOs appointed below the age of 45 than anywhere else in the world. A situation likely to try the patience of younger US executives, as if they don’t have enough to contend with.

Grass routes reform

The taxman is to introduce a new whistleblower scheme, leading to hefty rewards for those willing to identify wrongdoing.

The aim is to copy arrangements present in the US which, stateside lawyers Benjamin Calitri and Kate Reeves write, is good idea, especially if the UK passes the whistleblowing bill. This legislation would take the protection of whistleblowers away from employment tribunals to rest it with a specially constituted Office of the Whistleblower.

Calitri and Reeves write, in an Oxford business law blog, that the Post Office Horizon scandal has helped make it clear that whistleblower reform is badly needed here in Britain. And, in particular, because the US appears to be pulling back from global anti-corruption efforts.

“British policy makers should act swiftly to implement an effective system of whistleblower rewards programs in light of this precarity.”

Lucky stars

Are chief executives overpaid? According to new research, many may be rewarded for being lucky.

A team of profs from London Business School, INSEAD and the University of Utah looked at what happened to chief executive pay in the US after the 2017 introduction of the US Tax Cuts and Jobs Act (TCJA) during Donald Trump’s first term in the White House. According to the way the legislation is applied, some companies benefited massively, through no action of their own.

Turns out the research shows those CEOs in companies that were boosted by the TCJA “were paid significantly more than firms reporting small windfall gains”. Some CEOs benefited to the tune of $330,000, the researchers say.

“This pay-for-luck occurs mainly for CEOs whose pay is poorly scrutinised because the firm has a weak board of directors, few analysts following its activities, more transient investors or attracts scant media interest.” That sound you can hear is the US CEO choir humming Kylie Minogue’s “I should be so lucky.”