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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.

Business secretary, Vince Cable, is committed to pay reforms that will see him introduce guidelines this summer for additional transparency about boardroom rewards. He has suggested that companies should publish a single figure in their annual reports for what each executive earns in any one year. However directors' pay has become so complicated that calculating that figure is extremely controversial.

The attached document is a response by the High Pay Centre to the growing complexity around top pay and ways in which we think remuneration totals can be calculated.

This is one of a number of reports by the High Pay Centre. We have previously looked at the make-up of remuneration committees. Over the coming months we will also be looking into boardroom practices, footballers' pay and the role of shareholders.

Download report

Posted on 11 May 2012

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