The
issue of pay is always a sensitive one, so it is not surprising that feelings
ran high at GlaxoSmithKline’s (GSK) annual meeting last week, when shareholders
voted against the board’s plans to award its chief executive a potential £22m
if he lost his job.
GSK’s
shareholders were exercising their right under powers introduced last year,
giving them the opportunity to vote annually on the levels of directors’
salaries.
The
decision, which is the first time shareholders have voted against a board’s
remuneration report, was welcomed by trade and industry secretary Patricia
Hewitt and union leaders.
The
TUC now wants the Government to go further and change the law to ban what it
calls ‘payments for failure’. However, regulation is surely not best placed to
deal with contractual issues because its focus is on rules and not the spirit
of the wording.
It
is in employers’ interests to take the lead on improving pay transparency and
forging better links between senior executive performance and remuneration.
This
is not just because of the upsurge in shareholder activism, but also because of
the views the other key stakeholder group – the employees themselves.
It
is difficult to develop a committed workforce, whose own pay prospects depend
on them developing key competencies and meeting targets, if their senior
executives are rewarded not just for mediocrity but, on occasion, failure.
This
is where HR has a role to play. It needs to ensure that organisations’ reward
policies from top to bottom are linked by some common criteria so the employees
responsible for driving shareholder value remain engaged and motivated.
Surviving
redundancy
This
week, Careerwise offers you advice on how to prepare for your own redundancy.
This
is not because we know something you don’t, or that you should expect to be
ousted from your job in the coming months, but because redundancy is now a fact
of life.
HR
staff are so busy dealing with the others within organisations that often they
are ill-prepared to deal with being made redundant themselves.
In
times like these, when economic upheaval shows few signs of abating in the
short term, it is prudent to watch out for the signs that may lead to
downsizing in your own HR department.
Ensure
you have plan B in place, and that you can turn a job loss into a real career
opportunity.
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