Overcast

Overcast

max temp: 19°C

min temp: 11°C

Search
Archant Local Impact

Executive pay ‘needs an overhaul’

PUBLISHED: 12:00 06 April 2017 | UPDATED: 12:26 06 April 2017

A handful of the new £1 coins. Picture: Ben Birchall/PA Wire.

A handful of the new £1 coins. Picture: Ben Birchall/PA Wire.

Public pressure to crack down on excessive executive pay must not lead to all company heads being tarred with the same brush.

This is the view of a regional investment manager as a committee of MPs claim exorbitant rises in executive pay mean there is no longer a “credible link between remuneration and performance”.

The Business, Energy and Industrial Strategy (BEIS) select committee said public confidence in corporate governance had been shaken by scandals like Sir Philip Green and the BHS pension fund and BP boss Bob Dudley’s £14m bonus in 2016 amid massive losses at the oil giant.

Richard Larner, Norwich branch manager at investment management firm Hargreave Hale, said long term incentive plans – known as LTIPs – offered to company executives had been “overgenerous” at some firms and could “advantage individuals beyond what is reasonable”.

He said: “It is the duty of shareholders, particularly institutional shareholders, to take an interest and make sure incentives are not beyond what the executives should be paid.

“It is certainly not the case that executive pay across the board is too high. There is a danger that the whole executive pay market could be tarred with the same brush.”

Mr Larner added that LTIPs – which are paid out on the achievement of pre-agreed targets – had been criticised for operating on too short-term a basis.

“From an investor point of view, there is a desire for the long-term strategy to be right and therefore you do not want an LTIP which does not require the completion of long term goals,” he said.

Aviva chief executive Mark Wilson took home a £4.3m pay package last year - backed by 97% of shareholders - including £1.13m from his LTIP. That agreement could see him earn up to 300% of his base salary, judged on the company’s rolling three-year performance.

His predecessor, Andrew Moss, was ousted after a shareholder revolt over perceived over-pay and under-performance.

In its 2016 report, remuneration committee chairman Patricia Cross said: “When we decide on annual bonuses we firstly review achievement against key financial and non-financial targets.”

In 2016, the chief executive and chief financial officer at Greene King were awarded bonus pay-outs of 97.5% and 77.5% of eligible salary respectively.

Following the EDP/EADT Top 100 company’s acquisition of Spirit Pub Company in 2015, the executives were awarded base salary increases of 13% and 7%.

Search hundreds of local jobs at Jobs24

A firm which employs 200 staff is the latest company to move to Riduna Park in Melton.

Turkey giant Bernard Matthews says it’s “back on track” with plans to expand its Norfolk workforce by creating 400 new jobs.

Needham Market has become the first town in East Anglia to have a shop dedicated to equity release.

Applications for the Greene King Apprenticeship Programme surge by 141% following its 2016 pledge to take on 10,000 apprentices

An important milestone has been reached for Colchester Borough Council’s (CBC) new private housing development company, Colchester Amphora Homes Ltd, with the appointment of an architect to deliver the designs for the first phase of developments in the town.

Management Jobs

Show Job Lists

Most read

Topic pages

Newsletter Sign Up

Sign up to the following newsletters:

Sign up to receive our regular email newsletter

Our Privacy Policy

MyDate24 MyPhotos24