Some of the recent bruhaha over boardroom pay rather smacks of the politics of envy. There is no doubting that some executives are massively overpaid but that is no reason to bash all high earners and to advocate 1970s-style command and control caps on wages. There are some good suggestions floating around (simplification of remuneration packages and publication of total pay of executives for instance) but there are also some bozo ideas (publishing highest to lowest ratios - an excellent way of mucking up industrial relations; workers on remuneration committees). On the latter, let's get this straight, it is ultimately up to the owners of a business what the CEO gets paid. It's their investment that's at risk.
So, how about a few simple changes? Annual, binding shareholder approval of board pay might be one (based on remuneration committee recommendations). More accountability to shareholders of the remuneration committee. Contracts that stipulate no golden handshake for firing of underperforming CEOs. Pay more closely related to shareholder value - so that it may go down as well as up.
How's that for a starter for ten?
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