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PIRC is the UK's leading independent research and advisory consultancy providing services to institutional investors on corporate governance and corporate social responsibility.

Since 1986, it has been the pioneer and champion of good corporate governance within the UK. PIRC has a wide spectrum of clients ranging from pension funds, faith-based investors, trade unions to banks and asset managers. Its Corporate Governance Service is an authoritative and vital resource for active investors, whilst its widely-read Shareowner Voting Guidelines provide a market-wide benchmark for investors and forms part of the movement for corporate governance reform and long-term wealth creation strategies for responsible investors. For more information about PIRC or to arrange a meeting, contact Janice Hayward, or call us on 0207 247 2323.

Lambert trashes performance pay

Vince Cable’s plans for reform of executive pay will fall short of achieving real change due to a fundamental misunderstanding of what actually drives CEO performance, says ex CBI boss Richard Lambert.

In an FT comment piece he contends that initiatives to monitor CEO pay will fail because the actual effects of a CEO’s influence on company performance are much smaller than perceived. As such, linking performance to pay has not and will not work. Lambert points to numerous studies that show outstanding CEO performance actually comes more from luck than brilliance or competence and that no amount of remuneration or awards can influence the outcome. What can help, he argues, is removing the pay for performance link altogether and creating a new template with new variables that encourage employee loyalty such as awards or other forms of recognition. Simply put, people are motivated by more than money – including CEOs.
 

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