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Executive Remuneration

  • Date(s)
    21 January 2015
  • Time
    08.30-10.00
  • Location
    Policy Network, 11 Tufton Street, Westminster, SW1P 3QB
Executive Remuneration

In recent years, executive pay has rocketed compared to median wages and the stock market. According to data supplied by MMK-Manifest, the median total remuneration of FTSE100 CEOs rose 10.6% pa between 1998 and 2013. Most of this increase has come through long term incentive schemes which account for over 40% of total remuneration and grew more than 18% pa through the period. In contrast, the FTSE 100 total return index increased at only 4.6% pa over the period with median gross annual earnings between 1999 and 2013 growing at just 3.0%.

To date, guidance emanating from shareholder trade associations on long term value creation does not appear to have had much impact in resolving this market failure. It also remains unclear whether the recent legislative changes permitting shareholders to vote on directors’ remuneration policies will bring pay awards in line with long term performance.

An expert panel will debate to what extent this over payment for long term performance is related to the structure of remuneration committees and a lack of shareholder engagement? Whether remuneration committees are actually addressing the right issue by focusing on executive pay rather than the pay of all employees involved in delivering value, and whether the government needs to intervene given the failure of the market mechanism.                                                                                                                                                                                                        

Panel:

Luke Hildyard, deputy director, High Pay Centre

Catherine Howarth, chief executive, ShareAction (Fairshare Educational Foundation)

Simon Walker, director general, Institute of Directors (tbc)

David Pitt-Watson, executive fellow of finance, London Business School

This event forms part of a new project on corporate governance and progressive capitalism led by Policy Network.
 
The work is kindly sponsored by the British Private Equity & Venture Capital Association (BVCA).
                                               

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