Why is CEO pay still so high?
It’s partly down to the way wages are set. Remuneration committees are tasked with setting and vetting pay and other benefits before approval by shareholders at an annual meeting (AGM). But these are usually staffed by well-paid non-executives who were once executive directors. That’s one bunch of turkeys who will never vote for Christmas. Shareholders are pretty toothless too. Several FTSE 100 firms have recently met with resistance. BT Group saw a 17% protest vote, including “active abstentions”, while some 40% of investors at Cable and Wireless either voted against directors’ pay packages or abstained. Yet such votes are only advisory, “and appear to have been largely brushed aside by the low-profile non-executive remuneration committee members”, says Bowers. The other issue is what City minister Lord Myners described as “the ownerless corporation”, where quoted firms do more or less what they want regardless of shareholders’ wishes. Part of the problem here is that a focus on short
