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HPC responds to Select Committee Inquiry on Executive Pay

Our response highlights the limited progress of reforms recommended by the Business, Energy and Industrial Strategy Select Committee

We have responded to the Business, Energy and Industrial Strategy Select Committee's Inquiry on Executive Pay. Our response highlights the lack of progress made in relation to recommendations made in the Committee's 2017 report.

For example, there are still very few companies who align their bonuses with broader corporate responsibilities (relating to their social or environmental impact, for example), as opposed to financial or operational metrics. Vast Long-Term Incentive Payments (LTIPs) are still the prevailing method for paying executives, despite the growing evidence that performance-related executive pay is not particularly effective and that much smaller 'restricted share' awards would be a better form of reward.

The response also argues that remuneration committees and institutional investors are failing to hold companies to account over their pay practices, and recommends greater say for workers in the pay-setting process.

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Posted on 16 May 2018

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