The UK’s bonus system among the world’s most unfair - CIMA

Billy Bambrough
Follow Billy
Circus acrobats balance on the high wire at the Mc
Unbalanced bonuses are caused rifts to emerge within businesses (Source: Getty)

​The UK’S bonus system is not fair a survey from the Chartered Institute of Management Accountants (CIMA) has revealed.

It found the UK has the second-least meritocratic bonus system in the world with bonuses causing resentment among two-thirds (35 per cent) of UK firms.

Only the United Arab Emirates faired worse than the UK, with 42 per cent feeling bonuses were awarded unjustifiably.

Read more: Three job titles which will earn you a bigger bonus than a chief executive

The CIMA is calling for bonus systems to be designed to encourage long-term success rather than only short-term performance.

“Designing effective incentive systems is hard, yet incentives that may be fair may not look fair – a challenge that touches on the issue of transparency as well as the question of both how and how much to incentivise,” said Wim A Van der Stede, CIMA professor of accounting and financial management.

Recently Neil Woodford, the star stock-picker and founder of Woodford Investment Management, made headlines by ditching bonuses at his firm.

Read more: Why Neil Woodford’s experiment could impact your workplace

Woodford condemned what he called “frustratingly rife” short-termism in the City, lending his support to a stinging criticism of executive pay levels and a failure of investors to hold management teams to account.

Related articles