UK’s bonus culture: Pandemic pay cuts to have little effect

36 companies on the FTSE 100 have announced cuts in executive pay due

LONDON:

Pay cuts taken by British bosses during the pandemic will have little effect on the “bonus culture” causing wide inequalities within companies, according to a study published on Wednesday.

A total of 36 companies on the FTSE 100, the London Stock Exchange’s flagship index, have announced cuts in executive pay due to the economic crisis resulting from the pandemic, the annual report said. It is produced by the Chartered Institute of Personnel and Development (CIPD) and the independent think tank High Pay Centre.

But these measures are “superficial or short-term” and do not change the “bonus culture” which allows big bosses to earn huge sums in the variable part of their remuneration, they added. None of the companies implementing the pay cuts have tackled the long-term incentive scheme, which generally makes up around half of executive pay, the analysis said.

“It doesn’t look like the pandemic has proven to be an inflection point for executive pay yet,” said Peter Cheese, Chief Executive of the CIPD.

Published in The Express Tribune, August 6^th, 2020.

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