Australian firms 'must engage investors on executive pay issues'

Businesses in Australia have been called upon to dedicate greater efforts towards addressing the growing concerns caused by executive pay policies.

David Crawford, chairman of Foster's and Lend Lease and one of the nation's most senior businessmen, told attendees of a recent Australian Institute of Company Directors forum that corporate pay levels have become increasingly problematic.

He noted that pay rates have risen far in excess of other business costs in recent years, meaning proxy advisers and shareholders will be feeling more pressure to address the trend, reports the Australian.

As such, the business leader recommended that boards will need to communicate and engage with them as early as possible in order to tackle the issue.

"I think that is a fact of life we have to recognise because the proxy advisers are here to stay and we are going to have to work with them," Mr Crawford said.

This comes after a report from the Australian Institute of Company Directors last month suggested that proxy advisers could be starting to have too much influence over key issues of governance.