Executive pay rules are harming employee retention

A recent survey of HR specialists found that almost two thirds of companies believe that executive pay has been curbed as a direct result of new rules introduced in October 2013.

The executive pay legislations required a binding shareholder vote on pay policies. In the report, conducted by Linklaters, 58% of people asked felt that the new rules had impacted pay packages for their Board members, but that they have been able to manage within the new framework.

However, a further five per cent admitted that these new rules on pay had made it hard to hold on to top talent at their companies. They explained in the survey HR was now finding it difficult to attract and retain the best employees.

Speaking to Executive Grapevine, Graham Rowlands-Hempel, Partner at Linklaters, discussed the implications of the findings, saying: “Over half of those surveyed thought that the rules introduced in 2013 had curbed executive pay although they could continue to work within them.  However, five per cent thought that the new rules have had an adverse effect on recruitment and the ability to retain talent.