More than a quarter of chief executives at some of the UK’s largest companies receive bonuses even if profits rise by as little as 1% above inflation, new research has found.
A survey conducted by centre right thinktank the Bow Group, found that about one in 10 firms will still pay bonuses if profits fail to beat inflation.
The study focuses on performance shares, which are handed out to chief executives if profits rise by a certain amount. Bow found that 33 companies in the FTSE 100 use such shares.
Christopher Mahon, author of the report, said: “Boardroom bonuses should reward exceptional performance and should not be paid by default. Setting very low performance targets encourages a ‘bonuses for nothing’ culture where merely standing still is rewarded.”