Recession no excuse to relax performance targets

by David Masters

Story link: Recession no excuse to relax performance targets

The Association of British Insurers (ABI) has warned that the recession should not be used as an excuse for companies to relax pay-related performance targets for executives.

Peter Montagnon, ABI’s director of investment affairs, said companies should not retrospectively reduce targets because of the economic climate.

Businesses need to show ’sensitivity and restraint’ in deciding on executive bonus pay, or risk incurring a vicious public backlash, Montagnon said.

ABI’s warning come after a £350,000 ‘retention’ bonus was paid to the chief executive of troubled mutual Equitable life, Charles Thomson, ensuring that he would spend another year at the company.

Meanwhile, three executives at house building firm Bellway have been paid bonuses worth 55% of their base salary, despite company sales falling by 50%.