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Editor’s letter: Beans and peanuts

THE hand-wringing, wailing and gnashing of teeth from governance lobbyists over directors’ pay seems to be having some effect. While equities have performed strongly in recent times, actual corporate performance has been steady and nothing to write home about. As such, you’d expect FD salaries would reflect that. And, on the whole, they do. Our 2014 FD salary survey shows average total pay has crept down. Of course, when I say ‘average’, we’re talking about substantial six- and seven-figure sums. Beans on toast is not a daily occurrence yet for these execs.

There are issues that need resolving, though. In many instances, women are paid less than men – and while it is always difficult to compare roles like-for-like, that is a concern. Skipping a few pages forward to our 1999 predictions feature also shows that the number of women in the most senior finance roles has, disappointingly, not increased.

Getting to grips with the remuneration policies and measurements by which directors are rewarded is still a task requiring Bletchley Park-esque code-breaking skills. With the Financial Reporting Council looking at this issue, investors (and finance hacks) can but hope that we can achieve some clarity and transparency. You then have the small issue of aligning the interests of stakeholders with the aforementioned pay. Will short-term investors require directors to have short-term bonuses, and vice versa?

For all the fallout from the financial crisis, coming up with a coherent remuneration structure still stubbornly remains off in the distance. Once again, like the furore regarding corporate tax planning, we are left with the court of public opinion to rule. Dynamic and thrilling as this may be, this court is acerbic, knee-jerk and often plain wrong.

On a completely different, but much more positive note, I’m delighted to be able to congratulate former editor Gavin Hinks on winning an award for an article published in Financial Director. Gavin scooped the ‘best journalist article or blog post’ award at the Joint Professions for Good and Institute for Business Ethics Writing Awards. His article, ‘Corporate wrongdoing is all connected’, was published in the November 2013 issue of Financial Director, and looked at the crucial role played by management team dynamics, in determining whether unethical or criminal behaviour occurs in businesses. Well done, Gavin!

The article can be found at www.financialdirector.co.uk/2306768.

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