We're coming up to the AGM season where shareholders have the chance to ask questions and express their views about how their investments are being managed, including the continuing hot topic of executives' pay.
Vince Cable, the Business Secretary, has written to all FTSE 100 members to remind them that pressure on pay awards needs to continue. The public are still not convinced by the arguments justifying pay levels that seemingly bear no relationship to performance. It continues to be a key reason why trust in business is at an all time low.
"A lot of trust has been lost, because of the extremes of what happened in 2010, when pay escalated massively unrelated to the performance of companies" Cable has told the BBC. In relation to the banks he goes on to say "we will see how far they have listened to the people who own the bank.... He calls for them to "exercise responsibility in the long-term".
With pressure now on more responsible business practice from customers, regulators and the government it still looks like some executives just don't get it. To change market positioning eg to rebuild trust in a bank, an organisation has to be competitive, consistent and credible. It's this lack of consistency in the area of pay which causes all other "responsible" initiatives to misalign and lack credibility and commitment.
Isn't it time now for NEDS and shareholders to flex their combined muscle in this area for the long-term interests of their companies and their returns? Or are they going to continue to let the proactive media stir the public pot of fury further? .
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