Shareholders should call the City’s bluff on executive pay, according to John Rider, West Midlands regional chairman of the Institute of Directors.
And he hit out at “greed and corrupt practices”.
Expanding on a piece in the latest edition of the IOD’s regional magazine, Mr Rider admitted the “flavour of the month” issue of pay and bonuses was largely centred on the FTSE 100 and London.
He noted: “There is no evidence this problem is afflicting our region – far from it. Given the difficult economic climate West Midlands directors have by and large been taking very small salary rises, no increase at all or in some cases reductions.
“But at the London end I agree it is not possible to justify the excesses we have seen; greed and corrupt practices must be stamped out. And the danger is it gives everyone a bad name – yet London and the regions are in a different world.”
Suggesting that binding shareholder votes could be step in the right direction, he went on: “I don’t buy the argument that we will necessarily lose talent overseas.
“We are in the middle of a global crisis. There are many talented people that can step into these senior leadership roles who wouldn’t demand excessive remuneration packages.”
On the economy, Mr Rider said there was still only “piecemeal” evidence of a growth strategy while business remained “tied up in red tape”.
But for all the doom and gloom there were reasons to be cheerful and it was important to get confidence flowing again. Manufacturing was holding its own, and Jaguar Land Rover was a beacon of expansion, creating much needed jobs including in the supply chain. Inward investors were looking hard at the West Midlands and the region was increasingly reaching out to the world.
And highlighting what could be done, he stated: “When the going gets tough – the tough get going.
“Businesses that have good teams, do their homework, and keep lean and flexible, are more likely to prosper in these tough economic conditions. Business leaders should take stock and re-assess their strategy.
“Hold on to your key customers. Check your team – great sales people are worth their weight in gold. Consider a board evaluation perhaps. Then plan and implement new approaches effectively. Time spent on these stages is rarely wasted.
“West Midlands entrepreneurs are a resilient bunch – we are well placed to take advantage of the upturn when it comes, hopefully later this year but certainly the next.”