Pay consultancies are responsible for pushing up executive bonuses to record highs, according to the Association of British Insurers (ABI).
Peter Montagnon, head of investment at ABI, blamed pay consultants for manipulating pay schemes to boost bonus figures to dangerous levels.
“This upward ratchet of remuneration is coming from consultants producing new ideas and schemes to push pay higher,” he said.
Delivering the ABI’s annual remuneration round-up, Montagnon warned that such high levels of pay could cause acute problems if the economy slumps.
This year, pay and bonus packages rose by 15% for executives in FTSE firms, according to figures from pay advisory service Independent Remuneration Solutions.
The ABI said it had no official powers to intervene in executive pay. “We can’t get far enough inside,” Montagnon said.