In response to the Business, Energy and Industrial Strategy (BEIS) Committee report on executive pay, ‘Executive rewards: paying for success’,  Charles Cotton, senior reward and performance adviser for the CIPD, comments:

“It’s high time that high pay is tackled. The growing gulf between pay for top earners and the rest of the workforce calls into question both the fairness and overall performance of our workplaces. Success is a collective achievement and it isn’t right that some top earners take home multi-million-pound packages while pay for their average worker has struggled to improve in recent years. 

“Organisations need to review the best way of rewarding their senior people. They must question whether executive long-term incentive plans are delivering quality and sustainable outcomes for businesses or just driving short-term profits that benefit the few.

“There needs to be a much stronger link between corporate performance and the remuneration of all workers, including those at the top. We want to see a new, broader definition of corporate success that goes beyond profit and loss and also looks at how people are managed, rewarded and developed and how customers are treated. To support this, we welcome the idea of the employee perspective being part of the pay governance process as part of broader reform of remuneration committees.” 

The CIPD and the High Pay Centre publish an annual analysis of FTSE 100 CEO pay. Last year’s analysis showed that CEO median pay rose by 11% between 2016 and 2017, despite prominent criticism from the investor community and the Government over excessive CEO pay awards in the past year.

The research found that FTSE 100 CEO median pay now stands at £3.93 million per year, an increase on £3.53 million in 2016.

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