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.
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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.”
