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Deloitte welcomes executive pay proposals

Deloitte have welcomed the proposals set out in the governments executive remuneration discussion paper, but recognises much work has still to be done to achieve best practices.

Yesterday Vince Cable expressed concerns over the way executives are paid, and proposed shareholders receive a bigger say on pay deals.

Stephen Hall, tax partner at Deloitte North East recognises the need ensure a clear link between executive remuneration and company performance, and views the papers as an opportunity to consider whether current practices could be improved in a wide range of areas.

He commented: “Our research indicates that there have been a number of positive changes to executive remuneration packages over the past few years, and we have seen a significant proportion which is deferred in the level of shares held by directors and the introduction of clawback provisions.

“However there is still some work to be done to ensure that pay and performance are more closely aligned, and we particularly welcome the debate on whether there are better ways of measuring performance than those typically used.”

The government have now opened a review into the issues surrounding executive remuneration, and will put forward new wide-ranging proposals on how to link executive pay more closely to company performance.

Stephen has previously used strategic performance measures to drive behaviours needed to achieve business strategy, than standardised incentive arrangements.

The head of the IoD also welcomes the changes, but yesterday accused the business secretary of politicising this issue.

Miles Templeman commented: We agree that it is right that the pay of business leaders is aligned to business performance, and there may well be some practical improvements that can be made to the pay levels are set in big companies.

“However, it is important that ministers do not politicize a subject that is best approached in a cool, dispassionate way.”

This was posted in Bdaily's Members' News section by Ruth Mitchell .