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Comment from Xactly: BP boss Dudley faces shareholder action over £14m pay

Tom Castley, VP of Xactly EMEA:

“There is a growing consensus that executive pay in the UK is too high, with research showing that over seven in ten workers believe this to be true. The news therefore that BP’s CEO will potentially see a pay rise push is surprising, when research also highlights that six in ten employees find that this high level of executive pay demotivates them.

“It’s not just the size of the executive’s pay packet that’s discouraging however, it’s the gap between the total salary of the boss versus the workers, and is particularly true when it comes to bonuses. Sizeable rewards for chief executives are especially demotivational for workers when there isn’t a bonus scheme in place for those at lower levels of the organisation, as is the case in many businesses in the UK.

“To really engage staff, levels of pay must reflect performance, whatever your position. If there is a clear and visible link between achievements and compensation, then pay can be a great incentive. If employees feel that both they and their bosses are being fairly rewarded, then the high pay packet at the top won’t be so depressing. It’s not that companies need to throw money at staff to improve motivation; smart bonus schemes encourage great performances - and productive businesses.”