Legal & General chief executive Nigel Wilson says City executives get paid “too much” after a report from the Executive Remuneration Working Group called for wide-ranging changes to executive pay.
Wilson said executive pay was “not fit for purpose and has resulted in a poor alignment of interests between executives, shareholders and the company”, the Times reports.
Wilson earned £4.7m last year.
He says: “The FTSE is trading at broadly the same levels as 18 years ago and 10 per cent below its peak. However, executive pay over the same period has more than trebled and there is an increasing disparity between average wages and executive wages.”
The report, published yesterday, has been put together by a group of large city shareholders and companies to find ways to improve the way pay is awarded. In particular, the report wants reform of long-term bonus schemes and more transparency.
The Institute of Directors director-general Simon Walker says pay should “recognise company performance, be clear and simple, and aligned with shareholders’ interests”.
He addd: “The report recommends that pay policies for senior executives are consistent with the approach for other employees. This is a worthy intervention that, if adopted by the market, could go a long way to restoring trust in our largest companies.
“The current approach to executive remuneration is failing. We are looking forward to engaging with this worthwhile initiative and urge FTSE boards to do the same.”