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Executive Pay: Doing things right for the future


The idea of "Building Back Better" - using this unique period to reflect on and question historic norms - is a concept that has filtered into many areas of society including how executives should be paid. The newspapers are full of stories of directors in well-known companies giving up part of their pay packages to "share the pain" being felt by stakeholders such as employees and shareholders. We are also witnessing a number of those that can afford to do so applying the pay given up in making charitable donations (often Covid-19 related). As well as pay cuts, responses to the crisis have included the cancellation of 2020 bonuses, reductions or waivers of long-term incentive awards and substituting pay for shares. 

The motivation for such actions is that it is commercially and morally the right thing to do.

Our article, "Executive Pay – Building it Back Better?", considers whether these necessary but temporary measures could be the trigger for a permanent change to the quantum and composition of executive remuneration.

For further advice and guidance on how businesses can "Build Back Better" by focusing on moving towards a more sustainable business model at the same time as meeting increasingly stringent legal and regulatory obligations designed to promote the stakeholder capitalism agenda, please visit our Sustainable Business hub.

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