Four common executive pay myths – PwC

Four common myths around executive pay threaten to undermine efforts to rebalance reward for this group, according to research from PwC. The myths are that:

• companies ignore shareholders on pay
• the increase in CEO pay for the last three decades is unjustifiable
• incentives don’t work
• there is no link between pay and performance.

In an effort to refute the first myth, the PwC research argues that, over the past three years, only around one in ten FTSE 350 companies received votes in favour of their remuneration report of below 80%, the common benchmark for significant opposition.

Tom Gosling, head of reward at the firm, said:

‘Executive pay needs reform, but it’s vital we focus on the right issues if that reform is going to be effective. If we wrongly diagnose the illness, then the cure won’t work. We need to base reform on robust evidence.’

‘Executive pay: time to listen’, PwC: www.pwc.co.uk/services/human-resource-services/insights/time-to-listen.html