Top CEOs fail to deliver shareholder value

Research by SCM Direct and the Evening Standard reveals that some of Britain’s highest-paid CEOs have significantly underperformed the stock market over the past three years, challenging the justification for their substantial remuneration. Alan Miller of SCM Direct stated: “The correlation between pay and share price performance is, at best, weak.” Despite CEO pay soaring by 1,460% since 1978, with current earnings averaging 400 times that of a typical worker, concerns about a “talent drain” from the UK persist. The analysis particularly criticises the fund management sector, where high salaries for executives at firms like Jupiter and abrdn have not translated into shareholder returns. Luke Hildyard, director of the High Pay Centre, said: “This research highlights how executive pay awards are subject to weak governance from supine remuneration committees and generally go far beyond what’s sensible or proportionate to business performance or the demands of the role.”