By Simon Meads

Speaking at a seminar on corporate governance organized by pensions industry body NAPF, Likierman said: "25 to 50 percent of the annual bonus of an executive should be based on their ability to deliver performance in the future."

Liekierman adds his voice to a growing clamour to unwind an executive remuneration system which is seen as a factor in exacerbating the global financial crisis.

The bonus culture, particularly in banks, has come under fire for encouraging risk-taking to boost short-term performance. A crackdown on bank pay has been a key talking point around the British government's bailout plan and bankers themselves are also rethinking the system [ID:nL4752354].

The Association of British Insurers (ABI) last week told Reuters it wanted EU-wide action to introduce bonus clawback clauses on executive contracts in the event of misstated accounts or deals that turn out to be loss-making.

Likierman cited a study by JP Morgan which showed that while 40 percent of the factors it defines as key business drivers look to future performance - such as branding, innovation and capital expenditure - less than 10 percent of remuneration is based on meeting forward-looking targets.

Likierman - currently a non-executive director at the Bank of England and at Barclays Plc. - added that in order to be able to assess performance, remuneration committees must employ non-financial measures and judgment. He said the basis of these judgments should be detailed in companies' annual reports and highlighted insurance company Aviva Plc , which he said had published an "extremely detailed" breakdown of executive targets, steps taken to achieve them and the level of bonus paid.

(Reporting by Simon Meads; editing by Elaine Hardcastle)