Member Article

Performance indicator slides

The link between the total pay increases that top UK chief executives receive, and the performance of their firms is weakening, according to a major new report.

The study found that while the average remuneration of bosses of companies on the FTSE 100 index rose 32% last year, the index itself increased just 9%.

Report co-author, business consultancy MM&K, said remuneration committees were struggling to stay independent.

It added that pay deals for bosses were too short-term focused.

The report also found that over the past 12 years, some share prices had not increased, but pay deals for chief executives had quadrupled.

While the study welcomed a move towards Long Term Incentive Plans (LTIPS) - linking share bonuses to the long term performance of a company - it said the duration of such schemes had shortened extensively.

This was posted in Bdaily's Members' News section by Ruth Mitchell .