Nils Pratley is wrong when stating that LTIPs (long-term incentive plans) have been the "executives` best friend and the biggest driver of inflation in boardroom pay" (Boardroom poison, 05/04/17). Those descriptions almost certainly belong to fellow executives on the pay committees, who know that driving up pay in other companies` boardrooms will lead to similar tit-for-tat increases in their own businesses. That`s why politicians calling for "a ban on LTIPs" are wasting their time, as replacements would soon be found.
Instead of the the business, energy and industrial strategy committee making recommendations about companies simplifying "the structure of executive pay" and publishing "pay ratios between top executives and other employees", it should be insisting that May`s government introduce legislation to ensure the necessary reforms are made. After all, didn`t Mrs May enter Downing Street with pledges "intended to hold corporate Britain to account" (Theresa May to unveil boardroom crackdown on private big business, 29/11/17)?
As your editorial states, productivity does rise "when employees have
access to the latest kit", and the necessary "skills to use it properly, but until company bosses are prevented from getting huge bonuses for continuing their short-termist policies, British productivity will remain 20% below that of European rivals (Brexit makes solving the productivity puzzle a priority,10/04/17). Not for nothing did Nils Pratley recently write that misleadingly named "long-term icentive plans" were the "executives` best friend", because they did not require, despite their name, long-term investment in technology and education to warrant the payment of obscene bonuses (Boardroom poison, 05/04/17).
Inevitably the CBI will spout forth the need for taxpayers` money to be spent on improving technical education in schools, so that company profits can rise, along with the productivity, but what is obvious to the rest of us is that British companies need to improve their apprenticeship schemes. The state certainly should "step into the breach", as is suggested, and a national investment bank would be beneficial. Until that development occurs, however, why not introduce legislation banning the payment of all bonuses unless productivity rises significantly? After all, Mrs May did enter Downing Street with pledges "intended to hold corporate Britain to account" (Theresa May to unveil boardroom crackdown on private big business, 29/11/17)?