There is increasing concern that executive pay is increasing at a rate that is out of touch with the rest of society, said Roger Barker, director of corporate governance and professional standards at the Institute of Directors, during an interview with Debbie Lovewell, deputy editor of Employee Benefits.
He added: “This invites a response in terms of public opinion but, perhaps more worringly, it potentially invites a response in terms of regulation.
“The direct regulation of executive pay is not something that organisations want to see, so if they can avoid that, and bring themselves back into line with the expectations of society as a whole, it would be much better for business.”
Barker advised employers to have robust, independent remuneration committees in place. He said: “There needs to be an independent perspective on the board and on the remuneration committee to make sure that a justifiable pay package is developed for the senior executives.”
The topic will be covered in the compensation stream at Employee Benefits Live on 26 September at Olympia, London.