DOWNING Street last night made clear that the Coalition was considering attempts to curb excessive pay for top executives as two-thirds of people in a poll said that the seven-figure salaries of company executives were immoral.
A year-long inquiry by the High Pay Commission has revealed that boardroom pay has soared by more than 4000% in the last 30 years, undermining productivity and damaging trust in British business. Over the same period, the average wage of the British worker has gone up barely fourfold and now stands at £25,900.
The inquiry found, for example, that the chief executive of Barclays earned £4,365,636 – 169 times more than the average worker.
The commission, an independent charity, called for a number of reforms, including a radical simplification of executive pay, putting employees on remuneration committees, publishing the top 10 executive pay packages more widely, forcing companies to publish a pay ratio between the highest paid executive and the company median, making firms reveal the total pay figure earned by executives and establishing a new national body to monitor high pay.
The Prime Minister’s spokesman said David Cameron wanted to see more responsibility in the setting of executive pay.
“When lots of people are finding times tough, they look at people at the top of society and think it is unacceptable that they are getting very large pay increases, so we are looking at this issue very carefully.”
Last night, a Comres poll of more than 2000 adults showed that 64% of people thought it immoral for people running large companies to be paid millions of pounds.
Some 68% thought pay inequality had got worse in the past 20 years while 71% believed large wage inequality was bad for social stability.
Meanwhile, reaction in Scotland was strong to the report yesterday. Peter Welsh, of Unite Scotland’s Campaigns Unit, said:“It’s ordinary workers who are struggling with mortgage and family responsibilities that it impacts on because they’re not seeing a fair wage – while fat cat pay, especially in the financial sector, is through the roof.”
Katja Hall, CBI chief policy director, said: “High pay should reflect outstanding business achievement. Mediocre performance should be challenged."
l Wage rises have fallen back to 2.3% following lower awards in leisure, retail, fast food and other private services firms, new research by Incomes Data Services showed today.
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