Legal News
IoD Warns Of “Unsustainable” Executive Pay (30 November 2011)
Date: 30/11/2011
The Institute of Directors (IoD) has described pay rates for business executives as "unsustainable" and claims that executives’ incomes are damaging businesses in the view of the public. Simon Walker, the director general of the IoD, has urged for action to limit executive pay packages that fail to be linked to business performance. Mr Walker claims that the IoD has noticed a rapid increase in executive remuneration at some of the largest listed UK businesses over the past decade. Mr Walker maintains that the IoD is aware of the challenges remuneration committees face but insists that the current rate of executive pay increase is unsustainable.
The IoD claims that the legitimacy of UK companies in the eyes of outsiders is considerably damaged by remuneration that fails to be clearly associated with company performance. The IoD proposes that executive pay policies should receive binding shareholder votes. It claimed that employee representatives should play a role in determining pay, with a significant “simplification" of pay packages for executives. It also claimed that acquiring independent non-executive directors from a greater number of professional backgrounds would result in an increase in "objective scepticism" in remuneration policies in comparison to boards comprising mostly current or former executives.
The employment law solicitors at Duncan Lewis can solve payment disputes. Although predominantly claimant focused, the team acts on behalf of both claimants and respondents in a range of employment law tribunals. The department possesses the size, skill and experience to represent a wide range of employers and individual employees.