Not an area I would willingly put myself in, but interesting to read about it. We all want as much as we can get away with, only within reason. There does become a time when the salaries become almost obscene. Executives aren't the only ones, professional sportsmen (not women, who seem always to be paid less) for example.
@martha - I wish you had gone one step braver, "I don't like remuneration and incentives that are based only on effectiveness and efficiency." We have lost efficacy is most of what we do in board works and craft with remuneration committees being agents of keeping the same without questioning if we are doing the right thing. Agree with so much of what you say. We are optimising for something we don't want, but like addition we find it hard to break because of the way we have framed risk.
it is a different story, however I support your view.
The accumulation of an executives successfulness with KPI measures is not an indicator of a future Directors performance - which becomes a basic issue for a remuneration committee, and that of risk - which means we maintain the same patterns. More diversity on boards helps, as long as diversity brings in different attitudes to risk, thought and willingness to change.
An interesting insight into the roles on remuneration committees. The most important question was missed though, “does paying executives large pay packets make a positive difference?” On the evidence of U.K. (and US) business, no, the only difference it makes is to the executives. A CEO of a leading company could drop dead, the shares would dip and three months later be higher than ever. The first question should always be, will this executive damage the business? The driving factor behind high pay is not performance (look at the low values of U.K. companies compared to the US) but the trends and belief you have to pay driven by the city and culture. I’d suggest reading Rakesh Khurana’s book: “Searching for a Corporate Saviour- The irrational quest for charismatic CEOs” Written over 10 years ago.
I also reject mentioning high pay for Ocado in the same sentence as the nurses pay dispute. Fundamentally different issues. It was wrong to conflate the two.
The mention of Ecosolutions pay scheme goes to the heart of the issue in companies which is Fairness, there is massive evidence about the positive impact of this issue on companies positive performance. Fundamentally the huge differentials between average company salaries and executives is unfair. As for the war for talent, the current low stock market valuations suggest we aren’t exactly playing in the Premier League.
Not an area I would willingly put myself in, but interesting to read about it. We all want as much as we can get away with, only within reason. There does become a time when the salaries become almost obscene. Executives aren't the only ones, professional sportsmen (not women, who seem always to be paid less) for example.
@martha - I wish you had gone one step braver, "I don't like remuneration and incentives that are based only on effectiveness and efficiency." We have lost efficacy is most of what we do in board works and craft with remuneration committees being agents of keeping the same without questioning if we are doing the right thing. Agree with so much of what you say. We are optimising for something we don't want, but like addition we find it hard to break because of the way we have framed risk.
Very valid - i Should have written more about the state of pay as well as the negotiation
it is a different story, however I support your view.
The accumulation of an executives successfulness with KPI measures is not an indicator of a future Directors performance - which becomes a basic issue for a remuneration committee, and that of risk - which means we maintain the same patterns. More diversity on boards helps, as long as diversity brings in different attitudes to risk, thought and willingness to change.
https://opengovernance.net/the-accumulation-of-an-executives-successfulness-with-kpi-measures-is-not-an-indicator-of-a-future-a170409a0c8a
An interesting insight into the roles on remuneration committees. The most important question was missed though, “does paying executives large pay packets make a positive difference?” On the evidence of U.K. (and US) business, no, the only difference it makes is to the executives. A CEO of a leading company could drop dead, the shares would dip and three months later be higher than ever. The first question should always be, will this executive damage the business? The driving factor behind high pay is not performance (look at the low values of U.K. companies compared to the US) but the trends and belief you have to pay driven by the city and culture. I’d suggest reading Rakesh Khurana’s book: “Searching for a Corporate Saviour- The irrational quest for charismatic CEOs” Written over 10 years ago.
I also reject mentioning high pay for Ocado in the same sentence as the nurses pay dispute. Fundamentally different issues. It was wrong to conflate the two.
The mention of Ecosolutions pay scheme goes to the heart of the issue in companies which is Fairness, there is massive evidence about the positive impact of this issue on companies positive performance. Fundamentally the huge differentials between average company salaries and executives is unfair. As for the war for talent, the current low stock market valuations suggest we aren’t exactly playing in the Premier League.
Yes - very valid - think that is another article though :-)