The so-called ‘Cable reforms’ to executive pay in 2012, together with the proactive efforts of remuneration committees, have kept executive pay stable and well matched with top people’s performance, according to consultant Mercer. In its response to the Business, Energy, Innovation and Skills inquiry into corporate governance, Mercer argues that the UK should now focus on improving corporate culture, transparency in the investment chain and the supply of executives, rather than further regulating the pay scene.
Sophie Black, Partner in Mercer’s executive remuneration business, said:
‘Our methodology shows that pay for the majority of UK executives is fairly balanced between shareholders and management. This sweet spot – the Zone of Fair Pay – has come about due to the reforms implemented by Vince Cable in 2012 and the efforts of compensation and remuneration committees. There are undoubtedly instances where public concern over excessive pay is justified and we support government efforts to make a fairer society. However, there are many parts of UK plc paying their executives in a responsible and fair manner.’