Research examines top pay under Covid

Research by the High Pay Centre think tank, in collaboration with The Open University, University of Nottingham and Western University, has examined how far leading British companies went in cutting executive pay in response to the economic upheaval of the first months of the Covid-19 lockdown.

The analysis used company statements made between March and May 2020 by 216 non-financial companies with a market value of over £500 million. It found that 104 firms (under half) took at least one measure to cut executive pay.

A salary reduction of 10-20% was the most common measure taken (by 50 firms). Eleven firms reduced salary by more than 50%.

The research also found that companies with more female directors and higher proportions of share ownership by institutional investors were more likely to cut executive pay. After factoring-in firm size, leverage, sector, board size and the level of pre-Covid executive compensation, the analysis found evidence of an association between female board representation, institutional ownership and executive pay cuts in response to Covid.

The High Pay Centre reports that many firms announced that cutting pay for their executives during the pandemic was a key way to demonstrate solidarity with lower-earning workers, and/or to control costs at a time of considerable uncertainty.

https://highpaycentre.org/wp-content/uploads/2022/04/Report_Final_March_2022.pdf