CBI: high pay must match performance

THE PAY of top company executives should be more closely aligned with their performance, employers’ organisation the CBI will say today.

In response to a government paper on executive remuneration, authored by Vince Cable’s business department, the CBI will call for remuneration committees to use simpler and more transparent criteria when setting executive pay.

And the pay of individual directors should be displayed as a single, aggregate figure – including salary, bonus and share options – in the annual report.

Executive pay should also be considered in the context of pay across the company, perhaps by establishing a benchmark so that top pay is linked to earnings elsewhere in the business.

Remuneration committees themselves should be populated by a widened pool of non-executive directors, and should be more aware of their power to claw back, reduce or withhold performance-related pay awards.

However, the CBI is not backing some of the more controversial measures being examined by Cable, such as employee representatives on all remuneration committees. It also said it did not support binding shareholder pay votes.