Industry experts have lambasted remuneration councils and stated the need for changes to executive bonuses in financial services.
They were speaking at the ABI's biennial conference yesterday, which examined the future of the City's bonus culture in light of the recent market crash.
Although speakers were divided on the exact route needed to achieve change, all agreed the discussion must be brought up more frequently going forward.
Robert Talbut, Royal London Asset Management's chief investment officer, said the recent period of strength in financial services overshadowed the problems lurking beneath the surface.
"We all became caught up in the heady environment during a period of enormous largess. We believed everyone was doing an exceptional job and needed to be paid extraordinary amounts," he said.
"The important thing is we do not arrive at that place again."
He added there seemed to be a culture in remuneration committees - which often help companies decide how much an executive should be paid - which allowed pay brackets to be ratcheted up.
"The remuneration committees do seem to operate in an environment where the best advice is to tell an executive he is vastly underpaid," said Talbut.
However how that will be altered going forward is a fractious debate.
Sir Andrew Likierman, the dean of the London Business School, said it is tempting to go back to a more traditional pay structure with stricter boundaries.
"We could pay people whatever it is necessary to get them to come into the company and whatever is necessary to get them to stay. I do not think it is extremely absurd," he said.
However, Mark Burgess, head of Legal and General Investment Management's active equities team, said the right remuneration structure can encourage people to act in the best interest of the company.
"I do not think I am prepared to tear up the existing model at this stage," he added.
Either way, Burgess concluded things will have to change going forward.
"I do think we have a problem. The public have gotten to a point where they are not going to take it anymore," he said.IFAonline
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