Interview with Simon Walker, head of the Institute of Directors, in the Daily Mail. Simon is on the committee steering our project on performance-related pay. “Over the last decade, it has quadrupled without any clear link to performance.”
“I think it has got out of kilter. It has lost any sense of relationship with the real world that normal people live in. Business leaders are seen as aliens,” says Simon Walker about the inexorable rise in executive pay.
Mr Walker is interviewed by Daily Mail City editor, Ruth Sunderland, he says: “Median remuneration at FTSE 100 companies has risen much faster than the performance of the index, than retail price inflation, than at smaller companies. The link between executive pay, performance and the wider economy has become very hard to justify.”
The steering committee running our performance-related pay project includes David Pitt-Watson, from London Business School, John Plender from the FT, Ruth Bender from Cranfield Business school, Andrew Smithers from Smithers & Co and Duncan Brown, principal at Aon Hewitt, as well as Mr Walker. The project is being funded by Lord Sainsbury.
The project aims to come up with some simple guidelines as to how variable pay can be tied more closely to individual and company outperformance rather than be awarded to executives for simply doing their jobs.
We will be publishing a report by Incomes Data Services on the rise of performance-related pay and whether this is linked to company performance, in October. Later in the year, we will be issuing a report based on interviews with leading businesspeople about how they define exceptional performance as well as polling IOD members about performance pay. Further updates and relevant reports will be published on our website and twitter feed: @HighPayCentre
The full interview with the Daily Mail can be found under this link: http://www.thisismoney.co.uk/money/markets/article-2730252/My-quest-drive-excess-pay-I-believe-capitalism-not-cronyism-says-Institute-Directors-chief.html#ixzz3B1RzLRxq