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'Negligible' link between executive pay and firm's performance |
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#1 |
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Join Date: Oct 2013
Posts: 9,313
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'Negligible' link between executive pay and firm's performance
Quote:
The chief executives of Britain’s leading 350 companies each took home a median pay package of £1.9m in 2014, a rise of 82% on 13 years ago, research commissioned by the UK arm of the CFA Institute, the global association of investment professionals, found. Well I'm really surprised at that
But the rise was not mirrored in the fortunes of their employers, with return on invested capital – the report’s preferred measure of performance – up by less than 1%. |
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#2 |
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Join Date: Sep 2006
Location: Lost
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I remember reading about this at least a decade ago, but I guess more evidence never hurts. Perhaps this time people will start listening?
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#3 |
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Join Date: Nov 2003
Location: Nailsworth, Gloucestershire
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If I remember correctly one of the other newspapers did a similar survey @ 10 years ago, The Times, perhaps, and they came to precisely the same conclusion.
I think executive pay rises should be linked to employee rises. If they can't afford to give the employees a pay rise then they can't afford to give the board a pay rise either. The whole mantra of "having to pay the best to get the best" is a real busted flush now. |
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#4 |
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Join Date: Nov 2002
Location: great yarmouth
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Quote:
If I remember correctly one of the other newspapers did a similar survey @ 10 years ago, The Times, perhaps, and they came to precisely the same conclusion.
I think executive pay rises should be linked to employee rises. If they can't afford to give the employees a pay rise then they can't afford to give the board a pay rise either. The whole mantra of "having to pay the best to get the best" is a real busted flush now. |
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#5 |
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Forum Member
Join Date: Sep 2006
Location: Lost
Posts: 43,320
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Quote:
If I remember correctly one of the other newspapers did a similar survey @ 10 years ago, The Times, perhaps, and they came to precisely the same conclusion.
I think executive pay rises should be linked to employee rises. If they can't afford to give the employees a pay rise then they can't afford to give the board a pay rise either. The whole mantra of "having to pay the best to get the best" is a real busted flush now. |
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#6 |
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Join Date: Oct 2013
Posts: 9,313
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Quote:
The whole belief that performance related pay improves performance is actually false as well (and that applies to everyone not just executives). In fact it's been shown many times to damage performance in the long term.
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#7 |
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Join Date: Oct 2004
Posts: 14,637
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Quote:
The only accurate performance related pay is piece work.
No doubt, those same firms seem to find the cash to pay the directors handsomely |
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#8 |
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Join Date: Jun 2006
Location: Isle of Wight
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The high executive pay in the UK is he main reason I don't think many UK companies will relocate to an EU one after Brexit, as Germany is the second biggest payer and that is 50% lower than the UK on average, I can't see the greedy gits moving and taking pay cuts.
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#9 |
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Join Date: Nov 2009
Posts: 1,171
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Quote:
I think executive pay rises should be linked to employee rises. If they can't afford to give the employees a pay rise then they can't afford to give the board a pay rise either.
![]() Another could be that any company that has had to lay off staff costs their executives their bonus. I've always taken the view that whenever a company announces redundancies, it is an admission of failure right from the top. To me it is indicative of poor planning and forecasting, declining business due to poor customer service, brand damage or failing to keep a pace with competitors and offering desirable products and services. I kid you not, I was working at a FTSE 100 company that announced huge unexpected losses one year and their share price bombed. All staff bonuses were cancelled that year. Except the CEO who got his, because his performance targets were based on customer service!!! Not the companies financial performance! Talk about a set up. Was obvious they knew a bombshell was coming, so the chairman made absolutely sure the CEO was given a performance related pay target that would still allow him to collect his £2mil in shares or whatever. The only type of CEO I respect are those heading businesses that they personally founded. All the rest of the CEO's for hire are just pure scum to me, earning their roles through connections and the old boys club. |
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#10 |
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Join Date: Aug 2006
Location: Dark Satanic Mills
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I too have been saying this for years. Maybe I am a closet "expert"
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#11 |
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Join Date: May 2006
Posts: 19,176
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Quote:
I quite like that idea
![]() Another could be that any company that has had to lay off staff costs their executives their bonus. I've always taken the view that whenever a company announces redundancies, it is an admission of failure right from the top. To me it is indicative of poor planning and forecasting, declining business due to poor customer service, brand damage or failing to keep a pace with competitors and offering desirable products and services. I kid you not, I was working at a FTSE 100 company that announced huge unexpected losses one year and their share price bombed. All staff bonuses were cancelled that year. Except the CEO who got his, because his performance targets were based on customer service!!! Not the companies financial performance! Talk about a set up. Was obvious they knew a bombshell was coming, so the chairman made absolutely sure the CEO was given a performance related pay target that would still allow him to collect his £2mil in shares or whatever. The only type of CEO I respect are those heading businesses that they personally founded. All the rest of the CEO's for hire are just pure scum to me, earning their roles through connections and the old boys club. As a member of the Co-op I'm still fuming at an executive leaving, of her choice, after just 11 months and getting a years salary in lieu of notice, 6 months 'gardening leave' and a 'long term bonus' of another years salary. Long term bonus after 11 months! |
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#12 |
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Forum Member
Join Date: Nov 2003
Location: Nailsworth, Gloucestershire
Posts: 10,402
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Quote:
The high executive pay in the UK is he main reason I don't think many UK companies will relocate to an EU one after Brexit, as Germany is the second biggest payer and that is 50% lower than the UK on average, I can't see the greedy gits moving and taking pay cuts.
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