Fewer than half of Britain’s leading businesses cut executive pay in response to the economic impact of Covid-19, new research suggests.
The High Pay Centre said its study indicated that firms which did cut executive pay had more female directors on their boards and a higher proportion of share ownership by institutional investors.
The think tank’s study among 216 non-financial companies found that 104 took at least one measure to cut executive pay.
A total of 78 of these firms cut base salaries or cancelled pay rises while 29 reduced or cancelled bonus payments.
Many firms announced that cutting executive pay during the pandemic was a key way to demonstrate solidarity with lower-earning workers, as well as controlling costs, said the report.
High Pay Centre director Luke Hildyard said: “Willingness to cut executive pay during the pandemic is potentially a good indicator of socially-responsible business decision-making more generally.
“The research suggests that this could be more commonplace at companies with diverse perspectives and life experiences in the boardroom, and with a higher degree of institutional ownership.”
A salary reduction of 10%-20% was the most common measure taken (by 50 firms) while 11 firms reduced salary by more than 50%, the report added.
Like this story? Why not sign up to get the latest business news straight to your inbox.
