Boards should not award exceptional pay for poor or mediocre performance

Josh Hardie, CBI Deputy Director-General, said:

“Let’s be clear, boards should not award exceptional pay for poor or mediocre performance. Firms should ensure that the salaries paid to executives are proportionate and that any increases are dependent on a company’s performance against its long term strategic objectives.

“Approaches to corporate governance must continue to evolve to support a modern, fair economy and address business failures where they exist.

“While there is more to do to improve the way businesses reward their top talent, the majority of boards are responding to this challenge in a positive way. The business leaders we work with increasingly understand that unless pay is squarely linked to performance, CEOs will continue to be seen as out of touch with wider society.”