Will those who set top pay take this report seriously?

Outlook

The Institute of Business Ethics has a question for remuneration committees on the eve of the AGM season: could you explain the outcomes laid out in your company’s annual report to the man of the street?

It’s debatable many could, and I’d add a question of my own to those answering yes: could you, then, justify them?

The IBE addresses this issue, and others, in a report by its associate director Peter Montagnon. In it, he worries that many committees lack a clear sense of the value of what they are awarding and says they ought to be expressing more scepticism about share-based awards, which can be very high, and often make up the bulk of executives’ rewards.

He is not alone here. Nor is he alone in expressing concern about the public’s increasingly cynical view of executives’ packages and their consequent mistrust of business.

Mr Montagnon is a former Financial Times journalist who then became the investment chief at the Association of British Insurers. He is far from being a radical. So you’d might hope the committees would pay due heed to his report. Sadly, others have been saying similar things to little apparent effect.