‘Prove payouts are reasonable’

Executive remuneration is and will continue to be an emotive subject. Political implications aside, if we distil the issue, what we are seeing is a majority shareholder – the government – grappling with how to enforce a pay for performance culture, amid unprecedented public scrutiny. The principles underlying executive remuneration have not changed: it must be competitive enough to attract and motivate the right talent, and incentive plans should encourage executives to achieve business priorities, short and long-term. What is different is that payouts must also be demonstrably reasonable regarding the performance delivered and the risk taken by the organisation.
 

Language does not simply reflect what is going on in organisational life: it also influences what people think and what they do

Linda Holbeche, director of the Holbeche Partnership and visiting professor of HRM/OD at Cass Business School