UK - Mercer is launching a new executive pay evaluation tool to help schemes monitor whether they get value for money from top paid executives.
Mercer Human Resources claims its research provides a new way of evaluating pay by removing inconsistencies when monitoring chief executives of the FTSE100.
The figures – which are based on a valuation method developed by Mercer in consultation with members of the business community – reveal typical base salaries of £600,000, bonuses of around £400,000 and pension payments of £450,000.
And Mercer wants wider consultation to agree a methodology that will remove current inconsistencies in the disclosure of executive pay.
Mercer Human Resource Consulting, European principal Clare Turner called for a uniform approach to make it possible to “compare apples with apples”.
She explained that pay packages could be valued in different ways and the figures which companies disclosed were open to wide interpretation. This, she said, had led to reports showing up to a threefold difference in total pay values for the same directors.
Turner added: “Shareholders, above all, need consistent and reliable information on which to base their assessments of executive pay awards.”
Proxy voting agency, Manifest managing director Sarah Wilson said: “This is an increasingly complex and fraught area and investors need to take a close look at value for money from the package in light of uncertain markets and unprofitability.”
The National Association of Pension Funds said high pay packages were not necessarily excessive providing they were linked to performance.
Calls for performance-related pay have intensified following former Alstom chairman Pierre Bilger’s decision to waive severance pay.
Bilger renounced his £2.9m payoff when he left following his efforts to rescue the heavily indebted engineering company.
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