Revamp: 'I've just had a brief look at the new website. I have to say it looks fantastic! Congratulations to all concerned on the obvious hard work put in.'
10/06/2015
The so-called ‘say on pay’ makes little difference to actual executive compensation packages, according to Andrew G Haldane, chief economist at the Bank of England. In a speech focusing on restoring trust in the banking sector, Haldane quoted Bank research suggesting that ‘corrupt’ is the word still most commonly used by the public when describing financial markets.
There continue to be high-profile examples of executives being paid amounts that do not obviously align well with their company performance, despite investors having their ‘say on pay’ through shareholder action. With very few exceptions, investor action of this type makes very little difference to executive pay packages. Yet high pay-outs for executives potentially have adverse implications for value creation by companies.
Haldane said:
‘Monies paid out to executives are monies not being re-invested in the company, reducing investment in physical and human capital.’
He added:
‘They also drive a wedge between management and their employees – a wedge that has widened to over 150 times median wages in the UK and over 300 times in the US.’