Executive
pay packages has created massive public outcry in recent times not only in the
business world but also within government corridors . This outcry was fuelled by general opinion
that executive bonuses do not reflect the performances of the firm in terms of
profit and share prices. The general view as always been that CEOs pay cannot
be directly linked to the performance of the company.
Andrew Moss CEO of Aviva forced to give up pay rise by shareholders
It
is a general knowledge that Shareholders are the owners of companies and the
executives act as their agent. For a
couple of years it seems shareholders have lost their powers to monitor the
activities of the so called AGENT .
Shareholders
have taken the back sit in the running of their firm and allow the managers to run
the firms, as well as deciding what they want as bonuses and
severance packages.
The
resurgence of shareholders in taking
charge of the companies as PRINCIPAL needs to be applauded. Since the beginning of the year,
they have woken up to their responsibilities by voting against bonuses that do
not reflect the performances expected.