Influential shareholder advisory service says fat-cat bonuses should be abolished, barring “ exceptional ” circumstances
Fat-cat bonuses should be dropped except in “exceptional” circumstances, according to an influential shareholder advisory service.
Pirc said it supported the abolition of annual payouts unless “an event worth a bonus has occurred.”
Call for change: Pirc said it supported the abolition of annual payouts unless “ an event worth a bonus has happened ”
And it claimed that long-term incentive plans in which executives still “pay out when there is a failure” and “reward the mundane” in exchange for achieving certain goals in which executives hold shares – often worth millions of pounds – in return.
The consultancy suggested that companies reduce the amount of variable executive pay and increase fixed pay.
The proposals are at odds with the policies of many publicly traded companies, which aim to reward directors with shares – making them shareholders and aligning their objectives with those of other investors.
In his consultation paper, Pay For A New World, Pirc said this concept was “a fallacy” as executives need to see what’s best for the company and shareholders as “part of the job.”