The answer, obviously, is the climate crisis. Excessive executive pay is an ongoing bugbear that deserves all the attention it gets. There is no evidence that bloated awards enhance either corporate or economic performance, rather they waste shareholders money and are frequently antithetical to their long-term interests. That’s particularly true when packages are badly put together and incentivise the wrong sort of executive behaviour. I refer you to the pre-financial crisis banking industry for perhaps the best example of that happening, but there are plenty of others.
That so few fund managers are willing to make a fuss about poor practice, even today, might have something to do with the bloated pay packages they themselves are fond of. But I digress, because even the most grotesque and damaging examples of executive excess pale by comparison to the impact the climate crisis is going to have on the global economy and thus on the investment returns shareholders seek. Really, it isn’t even close.
