Publication: It’s how you pay it
The latest report from the High Pay Centre looks at how a single figure for executive pay could be calculated
As investors increasingly speak out against excessive pay awards in the so-called "Shareholder Spring," one of the problems they encounter is the difficulty in calculating exactly how much top awards are worth.
The wide disparities in totals that are bandied around for top executives' packages, is one reason for a dramatic simplification in the way boardroom pay is awarded. We have called for pay to be stripped back to basics instead of the six or seven different elements that currently constitute directors' awards. However, there is also a pressing need to understand the current set-up.
Video: How to curb excess executive pay
Large institutional shareholders and corporate governance activists give their views to Pensions Week on fighting back against runaway remuneration
Action: Have Your Say On Pay
Are you concerned about excessive pay? If you have pension savings or an ISA then you have a stake in Britain’s biggest companies.
FairPensions have made it easy to contact your ISA or pension provider to get them to vote against excessive executive pay packets. All you need to do it go to their website and use their simple online tool.
- Your pension or ISA provider is a shareholder in Britain’s biggest companies and that gives you the right to have your say on high pay.
- Directors' pay and bonuses are put to a vote of shareholders.
- Ask your pension or ISA provider to vote against excessive pay.
Send big investors a message and ask them to: VOTE DOWN EXCESSIVE PAY IN 2012
Publication: Essential questions Barclays must answer on CEO Bob Diamond’s pay
Barclays is currently in talks with its shareholders over Bob Diamonds pay to prevent a revolt at the AGM on Friday
With Bob Diamond’s pay set to be worth anything from £6.3m to £27m, depending on the way it is calculated, the independent High Pay Centre is calling on Barclays to answer some key questions at its AGM.
Deborah Hargreaves, Director of the High Pay Centre said: “Barclays’ remuneration disclosure is confusing and opaque at best which is why there have been so many figures bandied around for what Mr Diamond actually received. Barclays needs to be straight with its shareholders about what it is paying and why.”
Blog: Myths about executive pay
Deborah Hargreaves, Director of the High Pay Centre discusses the current debate about pay at the top
As Vince Cable begins his consultation on executive pay reforms, it is clear there are a number of myths circulating about excessive pay at the top of the business world. The first is that the debate is somehow “anti-business,” another is that the problem is simply “rewards for failure,” and finally, that shareholders alone can address the issue.
These are convenient stories to tell. It is not hard to condemn “rewards for failure”: it is clearly not right to pay an executive millions in salary, incentives and bonus when he has screwed up.
It is also easy to label those who criticise the system of top pay and big bonuses as “anti-business.”
Media coverage:
The latest report from the HPC on the make-up of remuneration committees received significant media coverage. Here is just a flavour.
Independent - 'Old boys' network' alive on UK
Guardian - Executive pay soars as bosses set each others’ awards
City AM - Report: Directors setting each others’ pay harms businesses
Sky News - Executive Pay Bodies ‘Are Closed Shops’
Telegraph - Are UK boards pale, male and stale?
Publication: The New Closed Shop: Who’s Deciding on Pay?
This latest report from the High Pay Centre looks at the remuneration committees that set board level executive pay in FTSE 100 companies.
The study, The New Closed Shop: Who’s Deciding on Pay? found that, of 366 people who sit on remuneration committees which set lead pay for top executives, just 10% - 37 members - were not from business or financial intermediation. It also found that only 59, or 16% of the total, are women.
Key Findings:
· 46% of people sitting on remuneration committees are current or former lead executives
· 41 out of 366 remuneration committee members are current lead executives
· 33% of FTSE 100 companies have a current lead executive on the remuneration committee.
· 9% of FTSE 100 companies have a current FTSE 100 lead executive on the remuneration committee.
Seminar report: How employees set executive pay in Germany
Deborah Hargreaves, Director of the High Pay Centre reports on the recent HPC seminar
Since 2009, employees and trade unions have had a key role in setting the pay of their bosses in Germany. While the German two-tier board system came in for heavy criticism in the run-up to the financial crisis, it has been strengthened since then.
The supervisory board which consists of elected employee, trade union and shareholder representatives has been given the mandate to determine executive pay. Before new rules were passed in 2009, pay decisions were delegated to a separate remuneration committee. That committee still does the preparation for the decision-making, but the pay levels must be set by the board itself.
Blog: Is football the next Lehman’s?
Nick Isles, Chair of the High Pay Centre looks at footballer's pay and the impact it is having on the clubs and the players.
This was the question the High Pay Centre was asked last week on the back of Rangers players agreeing to take big cuts in their pay. And the answer is a qualified 'yes'. The economic facts are stark. In the Premier League 68% of clubs' turnover is taken in wages. This is around 20% too high to be sustainable. Only three clubs out of the 20 had ratios of player's pay to turnover below 60% - Arsenal at 29%, Spurs at 56% and Manchester United at 46%. In total last year the Premier League clubs lost over £500 million. A similar tale can be found in Spain, Italy and elsewhere in Europe. For clubs like Manchester United their fees from TV broadcast are more than their gate receipts, despite having the largest club stadium in the UK. United's net debt is over £500 million and Chelsea's over £700 million. United's interest payments on its loans at over £100 million per annum exceed their take on ticket sales.
Event: Worker representation on boards: lessons from the German model
First in a series of seminars on Better Business hosted by the High Pay Centre & supported by FES.
The first seminar will take place on Wednesday 21st March 11.30 – 1.00 in a central London location and will be on “Worker representation on boards: lessons from the German model”. We are pleased announce that the guest speakers at this session is Sebastian Sick, who is an expert on the German model and is responsible for company and labour law at the Hans-Boeckler Foundation.
Sebastian will introduce the topic responding to concerns over worker representation such as the ability of worker to influence decision making and the effect of stakeholder involvement. The discussion will then be opened out and chaired by Deborah Hargreaves, Director of the High Pay Centre.
The seminar is free of charge. If you would like to attend please rsvp to zoe.gannon@highpaycentre.org
Worth a read:
Former Greggs CEO calls for executive pay reform
As reported in the Guardian today the former CEO of Greggs, Sir Mike Darrington has become the first senior executive to break ranks with his peers and attack levels of boardroom pay. Darrington, who was knighted in 2004 for services to business, has pledged to use his retirement to campaign against excessive boardroom pay deals. He hopes to encourage other like-minded business leaders to offer a critical perspective from inside the executive world.
In particular Darrington, 69, is keen to scotch the myth that attacks on executive rewards are attacks on business. "It is a smokescreen and a lot of bollocks – it is the greed of the people [at the top] that is anti-business."
Read the full article here, or download the speech below.
New members of the Advisory Board appointed
We look forward to working with Jonathon and Justine in the coming weeks, months and years.
We are delighted to announce that our cross party advisory board has two new members, Justine Roberts and Jonathon Ford. Justine is the Founder and CEO of Mumsnet, the online community of parents, which instigated the now infamous biscuitgate. Jonathan is now the chief leader writer at the FT he started his career in investment banking, working for Morgan Grenfell as a corporate financier.
Worth a listen:
Can the bonus culture in the City change?
RBS boss Stephen Hester has bowed under pressure to refuse his bonus of shares worth almost a £1m. City AM editor Allister Heath and Deborah Hargreaves Director of the High Pay Centre debate whether the culture of high pay in banking is changing on the Today Programme.
Listen to it here.
New polling by the High Pay Centre shows support for action on top pay
Just 7% think a FTSE 100 chief executive should be paid more than £1m per year
Britain’s bosses’ pay is hugely out of line with what the public believes is justified.
Of those questioned just 7% of people think that a chief executive of a FTSE 100 company should be paid more than £1m per year, including all bonuses and pension contributions. Only 1% of people questioned felt that Britain’s bosses were worth the £4m plus that represents the FTSE 100 CEO’s current average annual reward.
Publication: Making the case for business reform
Five key questions on high pay, corporate governance and responsible business
The latest report from the High Pay Centre Making the case for better business, sets out the five key questions the new High Pay Centre will seek to answer in the coming weeks months and years.
These questions are:
1 Is it enough to tackle rewards for failure?
2 Can shareholders solve these problems?
3 How much do other stakeholders matter?
4 Is dealing with executive pay enough?
5 What are the real effects of excessive pay at the top?
High Pay Centre launched
New think tank will be independent and non-partisan
Following the announcements from the Rt Hon Vince Cable MP, Business Secretary, in Parliament on Monday we are pleased to announce the launch of the High Pay Centre.
The High Pay Centre is an independent non-party think tank established to monitor pay at the top of the income distribution and set out a road map towards better business and economic success
