Vince Cable yesterday set out the government’s plans to tackle executive pay. Here, our experts outline what moves the Coalition must make to reform practices that award CEOs for performance but fail to punish for failure.

 

Exorbitant CEO pay is linked to firm performance. But CEOs are rewarded more for good performance than they are punished for failure.

Brian Bell from the LSE’s Centre for Economic Performance finds that while CEO pay is generally linked to performance, most workers do not see similar increases when firms perform well.

Vince Cable is right to tackle executive pay, but to do so, he has to build a coalition from within the financial sector to encourage more spartan pay awards. This won’t be easy.

Reporting on Vince Cable’s speech at the Liberal Democrat conference 2011, John Springford argues that while his plan to address inflated executive pay is right in principle, it will be difficult in practice. To make it work, it has to get shareholders and corporate boards to agree to reduce their own pay.

The Hutton review is unlikely to solve the “wicked” problem of executive pay in the public sector

In a time of fiscal austerity in government, the pay levels for senior civil servants have come under increasing scrutiny. Sandy Pepper finds that despite the public’s seeming opposition to high pay in the public sector, there are no easy fixes, and that some of the recommendations in Will Hutton’s review may actually have the opposite outcome to what is intended.

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