Pharma companies paying big rewards for failure, says survey

One in 10 top executives in the pharma sector say that failing directors are being rewarded handsomely by the big companies despite their lack of success.

Research by interim management specialist Executives Online also found that senior managers believe the way directors are paid should be completely overhauled.

The survey, which was conducted among directors and senior executives themselves, found that 13% of executives feel that pharmaceuticals is the worst sector for rewarding poor performance, while 82% think the way top directors are remunerated should be overhauled.

'It is interesting and heartening to see that so many senior executives think that performance and rewards should be more closely linked and the current approach needs changing,' said Norrie Johnston, managing director of Executives Online. 'It shows that the vast majority of top managers are professional and dedicated and believe they should be rewarded well for doing their job properly.'

The interim management sector has led the way in developing fairer remuneration for senior executives with success-related fees. For the companies employing an interim manager, success-related fees ensure a return on their investment and force them to assess fully the real value of a project. For shareholders, it shows the company is rewarding executives for their achievements, and not their skills in negotiating a big pay packet, the company says.