THE CHIEFS of Britain’s biggest firms are too often paid enormous salaries even when they perform poorly, and should show more restraint in bonuses this year, the National Association of Pension Funds (NAPF) argued yesterday.
The group, representing 1,300 pension funds, wants a closer link between pay and performance to ensure managers really are working their best for shareholders.
“We will push back on the use of peer group benchmarking,” NAPF head Joanne Segars warned company boards in a letter to FTSE 350 firms.
“We are often told that each company is unique; as such we would like to see boards reflect more upon the drivers needed to enact their own individual strategies and less comparing themselves against their peers.”
And the group added it wants to see salaries increase in line with inflation, given the tough economic environment.
Segars also called for executives to be given more long-term incentives to align bosses interests with investors like pension funds which have lengthy time horizons.