One of the complaints I have about UK corporate governance is that I feel that executive renumeration doesn't really reflect the skills that the executive brings to the job, the innovation they have brought, the personal risk they have taken and the value they have delivered to the shareholders.
I think there are too many "placeholders" who are extravagantly rewarded for simply being there while the business succeeds or fails. I have no problem with someone being generously rewarded but only if they've done something to deserve it. The fact that executive pay has outstripped inflation, employee pay and business performance indicates to me that there is a problem.
The problem is that executive pay is set by other executives and unless it is grossly inappropriate the major shareholders couldn't care less. In any case few major shareholders are interested in the long-term health of the company.
In the UK the Financial Reporting Council will now apparently implement new rules to ensure that executives will work for the long term benefit of the business.
http://ift.tt/1slyyrx
My personal feeling is that sadly this will make no difference and that the executive fat-cattery will continue unabated.
I think there are too many "placeholders" who are extravagantly rewarded for simply being there while the business succeeds or fails. I have no problem with someone being generously rewarded but only if they've done something to deserve it. The fact that executive pay has outstripped inflation, employee pay and business performance indicates to me that there is a problem.
The problem is that executive pay is set by other executives and unless it is grossly inappropriate the major shareholders couldn't care less. In any case few major shareholders are interested in the long-term health of the company.
In the UK the Financial Reporting Council will now apparently implement new rules to ensure that executives will work for the long term benefit of the business.
http://ift.tt/1slyyrx
My personal feeling is that sadly this will make no difference and that the executive fat-cattery will continue unabated.
via JREF Forum http://ift.tt/1qeIwJC
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