Executive pay is eroding confidence, says group of UK bosses

Amid the controversy over boardroom pay at several companies in the UK, executive pay in the country is "not fit for purpose" and needs reform, a high- profile group that included some of Britain's most high- profile bosses recommended today.
The Executive Remuneration Working Group said there was "widespread scepticism and loss of public confidence" over executive pay.
Sainsbury's chairman David Tyler and Legal & General chief executive Nigel Wilson worked on the interim report.
The report wants reform of long-term bonus schemes and more transparency.
Wilson, the working group's chairman, said: "The current approach to executive pay in UK listed companies is not fit for purpose, and has resulted in a poor of alignment of interests between executives, shareholders and the company.

"Greater transparency, clearer alignment of shareholder, company and executive interests, more accountability on the part of Remuneration Committees and greater engagement with and control by shareholders, working through company boards, are vital to restore confidence in a system widely seen as broken."

Despite the fact the FTSE all-share index of public companies was trading at broadly the same levels as 1998, executive pay over the same period has more than trebled, the report says.
The "widespread scepticism" among the public over whether executives deserve their rewards was damaging for the big company sector, the BBC quoted the report as saying.

"Greater transparency, clearer alignment of shareholder, company and executive interests, more accountability on the part of Remuneration Committees and greater engagement with and control by shareholders, working through company boards, are vital to restore confidence in a system widely seen as broken."
Despite the fact the FTSE all-share index of public companies was trading at broadly the same levels as 1998, executive pay over the same period has more than trebled, the report says.
The "widespread scepticism" among the public over whether executives deserve their rewards was damaging for the big company sector, it said.
The report comes amid controversy over boardroom pay at several companies. Last week, 59% of BP shareholders voted against a 13.8million pound package for chief executive Bob Dudley, one of the largest revolts against boardroom pay in the UK.

There is also unrest among shareholders at other companies, including HSBC, WPP and Reckitt Benckiser as they prepare to hold their annual meetings in the coming weeks, the BBC reported.