Global Financial Strategy - Bowles slams IoD on exec pay

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Bowles slams IoD on exec pay

Friday 6 January 2012 – by Karina Whalley

UK MEP Sharon Bowles has lambasted a senior member at the Institute of Directors for suggesting that only company directors should decide on executive pay packages.

The chair of the European Parliament’s Economic and Monetary Affairs Committee said on Friday the comments were “outrageous” and called for employees to be included in salary decision-making.

Roger Barker, head of corporate governance at the IoD recently said that remuneration committees should still be made up solely of directors because the “the buck has to stop with company directors”.

Bowles said: “I fundamentally disagree that company directors should be able to set their own pay and that of their peers, behind closed doors, regardless of performance.

“It is outrageous that the head of corporate governance at the IoD should make such comments, particularly at a time when people are feeling the pinch of austerity.”

The London-based IoD has 40,000 members and supports, represents and sets standards for company directors.

Related articles:

UK shareholders say bank pay too high

UK PM sets out plans to curb exec pay

UK banks to disclose executive payments

Fed: More work needed on remuneration

Remuneration: the view Down Under

Rising executive pay for company directors is still a contentious issue, in particular the ability of senior business figures to sit on company boards and set each others’ pay packages.

In the European Parliament, remuneration, shareholder approval and transparency are current hot topics and Bowles has put forward various proposals during the consultation phase.

“The line that the buck stops with company directors is a fallacy,” she said, “they get the bucks and it is employees who lose their jobs when bad decisions are made.

“It is thousands of hard working people who make companies successful. They, in turn, should have a say on pay increases for the boardroom few.”

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