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Rediff.com  » Business » CEO pay should be linked to performance: Survey

CEO pay should be linked to performance: Survey

May 06, 2009 14:45 IST
At a time when corporate governance practices are a hot topic, a majority of Indian firms believe there is a need to evaluate performance of board members and significantly link compensation packages of CEOs to company performance, a KPMG report says.

According to the report based on a corporate governance poll by global consultancy KPMG, two-third of the respondents are of the view that there is a scope for improvement when it comes to board members having the right information and enough time to discharge their duties.

"About 85 per cent of respondents think the remuneration of chief executive officers (CEO) should be significantly linked to company performance. A significant majority would also prefer greater empowerment to independent directors," the report stated.

A key finding that emerged from the poll was the need for exemplary enforcement and stronger regulatory review and nearly three-fourth of the respondents (73 per cent) believe that risk management practices need to be improved.

Most respondents believe while steps at introducing code of conduct and whistle blower policy have been taken, there still exists a significant need to enhance integrity and ethical values in the larger eco-system, the report stated.

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