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27/02/2017
Although details of a CEO’s salary are nearly always publicly published, for example, in a company’s annual reports, less is known or understood about the reward packages of other members of UK boards. Secrecy feeds conspiracy, yet openness often generates outrage and fury, meaning the status quo prevails, according to Adrian Furnham, a business psychologist writing in a guest blog for the Chartered Management Institute.
The determination of executive pay is tricky and the mechanism for setting reward, typically through an in-house remuneration committee, may not be the fairest. The link between top pay and organisational performance is problematic; for example, how to produce metrics that do not drive perverse behaviours, how to reflect team performance in individual executive reward and how to take account of macro-economic events.