The need to offer high pay packets to attract top employees to the UK from the global talent pool is a ‘self-serving myth’, according to a report by the High Pay Centre.
The Global CEO appointments: a very domestic affair report, which looked at chief executive officer (CEO) appointments among the Fortune Global 500, explored the notion that huge financial incentives are a must to keep talent in the UK.
It found that less than 1% of top CEOs were hired from overseas, and 80% are promoted from within the company.
It also found:
- Four chief executives out of 489 were poached while serving as CEOs at another firm in a foreign country.
- In North America, Japan, Latin America and Eastern Europe not a single CEO was appointed from outside of the country the organisation was based in.
- 6.5% of CEOs were poached from another organisation while serving as a CEO.
Deborah Hargreaves, director at the High Pay Centre, said: “The global pool is, in fact, a drop in the ocean.
“These findings debunk the myth about internationally mobile chief executives flying around the world for new roles. This is one of the reasons for the sharp rises in executive pay in the past decade.
“Huge executive pay packets can no longer be justified on the basis that there is a competitive international market for chief executives.
“For the vast majority of these top executives, their priority is to develop the organisation and its people, and turn the business into a world leader.
“Shareholders should be wary of the person who is incentivised purely by the bonus, because this is what led us into the financial crisis we see today.”