Executive pay has continued to rise despite poor company performances, research has revealed.
A study, carried out by corporate government body Pirc and pension fund Railpen, found an inverse correlation between the salaries paid to executives and the performance of the FTSE All-Share index.
This is most obvious in the FTSE 100, reports the Guardian, where cash payments to executives rose by 80% between 2000 and 2008. The FTSE 100 fell by 30% during the same period.
Alan McDougall, Pirc managing director, said: “Shareholders need to use the rights they have to challenge companies over remuneration if we are to encourage the implementation of pay polices which reward long-term success.”
Pirc and Railpen’s study looks at the impact of the “say on pay” power held by investors at annual general meetings since 2002. It concluded that some investors have not used their votes effectively.