Every now and then, normally around the AGM season, the issue of directors' remuneration and its link to performance rears its head.

The latest report by Lancaster University Business School shows yet again no direct link between pay and performance.

Arguments run that to attract the best talent in a global pool of managers, remuneration must be competitive to peers. All too often, independent directors are more keen to get the next CEO or CFO rather than focus too much on an incentive package - that can follow later goes the argument.

In practice, once a package is settled it rarely gets revisited by moving base "fixed" pay to an incentive package. Often you will see packages enhanced i.e. by adding incentives rather than changing the mix of reward.

Institutional shareholders may protest, and there may be some uneasiness for the remuneration committee around the AGM, but study after study shows the fundamental focus on reward for success is missing in UK corporates.

Nothing is likely to change without either legislation, which seems to go against a liberal free market economy that Britain prides itself in, or giving shareholders the right to vote not only on the appointment of directors but also their individual remuneration packages. The current advisory resolution on the companies remuneration report has proved not to achieve the desired result. 

No one wants to stifle incentive, but directors' remuneration concerns will continue to hit the headlines until more power is given to shareholders or regulators to deal with the issue.