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Introducing Pocket PROXY
Damian Carnell
November 28, 2024
In partnership with
Introducing Pocket PROXY
Good corporate governance is critical to creating and maintaining shareholder value. Executive compensation attracts a major amount of investor attention and has accumulated a body of guidance on good verses bad, top pay practice.
For many companies the cost of executive compensation is not large. The investor attention arises not from the cost aspect, but perhaps from two main headings.
The first is fairness: Paying the going rate for a normal job in normal circumstances seems fair. But top pay packages are very big by normal standards. A typical FTSE 100 CEO package has a value similar to winning the National Lottery a couple of times a year. Ordinary folk find it hard to fathom why that level of pay is on offer; nor what the executive actually delivers in the job to make the level of pay worthwhile.
The second issue is strategy implementation linked to culture. The short- and long-term incentives should reflect the metrics describing the company's objectives for growth, profit and other critical factors. Incorrect metrics, soft targets, too much weight on short term aims are each of concern to investors, among other things; such as excessive risk taking for example.
A body of investor guidance on top pay expectations has been built over many years. Institutional shareholders often rely on Proxy Advisors to comment on governance issues of common concern to many investors; and while these proxies can be accused of "box-ticking" governance, their views carry much weight.
Pocket PROXY explains these factors in summary form.
To view the source documentation click here.
The sister publication to Pocket PROXY, MARKET @a Glance can be found here.
CORPGRO’s purpose is to help companies attract and retain people.
We do this by deploying our skills in reward, incentives, communication and human resource management.
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Warm regards,
Damian Carnell
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