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Leading Chairmen and CEOs concerned about board pay

A study by global executive recruitment firm Russell Reynolds Associates has revealed that 84% of the senior business leaders interviewed, among whom were representatives of 51 of the FTSE 100, believe there are problems surrounding board pay. The study, ?The Problem with Board Pay ? Concerns of Leading Chairmen and CEOs', offers valuable insights into the opinions of the UK's leading businessmen on a range of board remuneration issues.

 

David Shellard, Chairman, Russell Reynolds Associates' Board Practice says: ?The face-to-face discussions with Chairmen, Chairmen of Remuneration Committees and CEOs show that, in spite of extensive recent debate, the UK's business leaders remain concerned about board pay.  The most common problem, cited by 46% of Chairmen and CEOs, is an inadequate link between performance and pay.?

 

A number of respondents believed that a greater level of connection to non-financial, behavioural factors is essential in assessing performance, but others thought this would not be measurable.

 

Shellard adds: ?Nevertheless, we believe that board members' objectives need to be more clearly laid out; clearer targets should lead to greater motivation and better performance.?

 

One of the most intriguing findings of the survey was the apparent lack of influence held by shareholder voting.

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