AT times of economic crisis and financial hardship, there is a generally unhelpful tendency for some people to look at how much money is in the pockets of others.

In a UK context, the decade or so which has followed the 2008/09 financial crisis and associated deep recession has been a lamentable case in point.

In particular, at a time of huge pressure on household incomes, caused by the Conservatives’ dismal failure on the economic front and grim austerity programme, with this woeful situation exacerbated in recent years by Brexit, right-wing actors were able to fuel anti-immigration sentiment. The finger was pointed at immigrants, who in actual fact provide a very important boost to the economy and society overall, and struggling households were somehow persuaded that it was free movement of people between the UK and European Union countries that was the cause of their hardship.

It was a truly remarkable stunt by the right-wing, anti-immigration, pro-Brexit lobby.

Of course, the stunt played a major part in the Brexit vote. The UK population has of course already suffered financially as a result of this ill-judged vote. And there is worse to come on this front. Much worse, if the Tories succeed, following their technical Brexit on January 31, in their drive to haul the UK out of the European single market. They remain determined to do this by December 31, with or without a deal, and even amid the awful coronavirus pandemic.

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So the Brexit folly is one clear example of the type of grim consequences which arise when people focus on what they think others have got and believe wrongly that this is because money has been taken out of their own pockets. Especially when external forces move to drum up or exploit such discontent.

However, amid the human tragedy that is the coronavirus crisis and the associated economic dislocation as the focus has rightly been on saving many thousands of lives, the spotlight has been shone on the pay of one particular group: the bosses of big UK companies. This scrutiny has been entirely justified, and should continue.

This spotlight is nothing to do with envy based on misunderstanding, of the type that has fuelled xenophobia amid the Brexit debate. Rather, it is a considered and justified look at appropriate levels of pay for big company bosses, particularly in cases where these businesses are taking advantage of huge UK Government subsidies for furloughing workers and/or making staff redundant and/or cutting salaries for ordinary employees.

This is not to say that big companies should not be taking advantage of the scheme through which the Government will pay 80 per cent of the wages and salaries of furloughed workers up to £2,500 a month. The coronavirus lockdown has closed large parts of the UK economy and reduced activity in other areas dramatically. Depending on the sectors in which they operate, companies of all sizes will need this Government support, and it remains absolutely preferable that employers furlough and ultimately retain workers rather than take away their jobs, particularly in these grim times. The ultimate retention part is, of course, crucial here.

That said, against this backdrop it is right to shine a brighter spotlight than usual on pay levels of the bosses of these companies. And on the amount of dividends these companies have paid in recent years. People will have different opinions on these issues but they are certainly worthy of debate.

Research published this week by the High Pay Centre think-tank shows that, as of April 22, at least 18 per cent of FTSE-100 companies and 26% of FTSE Mid-250 companies were intending to take advantage of the UK Government’s coronavirus job retention scheme.

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The High Pay Centre’s research shows that the FTSE-100 companies which it knows have now furloughed staff using the scheme have in the past five years spent a combined £321million on chief executive pay and paid out £26 billion in dividends. It also calculated these companies had made £42bn of profits over this five-year period.

It noted that the Office for Budget Responsibility had estimated the total cost of the job retention scheme at £42bn.

The average annual pay of the chief executives of FTSE-100 companies taking advantage of the furlough scheme is £3.6m, the High Pay Centre noted.

Questions are inevitably being asked by the public about the extent to which companies might have been better able to absorb the cost of the coronavirus crisis consequences themselves had they paid out less in dividends or crimped executive pay. These are very valid questions, although the focus must be on maximising job preservation in the situation we are actually in. Such preservation will depend in large part on corporate behaviour and attitudes, as well as on the key support provided by the Government to protect jobs. And, while we can reflect on what might have been, it is important to remember that company bosses could not have been expected to see this crisis coming. What is crucial is for them to do the right things now.

The High Pay Centre noted the median annual pay for a FTSE-100 chief executive was £3.5m.

It estimated that 37% of FTSE-100 companies and 31% of FTSE Mid-250 companies, equating overall to 33% of the FTSE-350, had reduced executive pay. The High Pay Centre noted that cuts to chief executive salaries of between one-third and one-fifth had been the most common measure adopted, while observing “it is not always made clear whether this represents a reduction to the annual salary or [is] on a pro-rata basis for the duration of the lockdown”.

It meanwhile found that only 13% of FTSE-100 companies had cancelled or reduced the bonus or long-term incentive payments comprising the biggest component of executive pay awards. It added that, even in cases where there had been announcements about these remuneration elements, some statements referred to cash bonuses, meaning that bonuses could still be paid in shares.

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The High Pay Centre said: “Decisions by companies to cut CEO pay or withdraw or withhold dividend payments in this period of uncertainty should be welcomed. They will increase companies’ financial resilience by reducing costs, and represent a well-intended gesture of solidarity at a time when many people are undergoing real hardship.”

However, it added: “At the same time, the fact that only a third of the UK’s leading companies have acted to contain top pay might be considered surprising. Similarly, the levels of reduction proposed are highly varied. Temporary salary cuts do not represent a particularly generous sacrifice in the context of median FTSE-100 CEO annual pay of £3.5 million – enough money in one year to afford an entire lifetime of comparative luxury relative to the average UK worker.”

On the dividend front, the High Pay Centre noted that 33% of FTSE-100 companies had withdrawn or withheld dividend payments by the time it concluded its research.

The fact of the matter is, while the Covid-19 coronavirus pandemic has shone the spotlight brightly on executive pay and dividends, there has for at least two decades now been very good cause for debate over whether or not the amount of remuneration received by big company bosses is excessive. And, just as crucially, for examining whether these pay levels and the way in which they are designed encourage counter-productive short-term behaviours.

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The dividends question may be less frequently contentious. However, where companies are cutting jobs and reducing employees’ pay and benefits because they claim they have no choice, it is perfectly valid to scrutinise dividend levels.

Amid the global oil and gas downturn that followed the previous crude-price plunge which began in the second half of 2014, for example, questions were raised about the appropriate distribution of the pain between employees and shareholders.

The previous downturn rightly sparked debate on whether employees, in the North Sea and other oil and gas territories around the world, had borne too much of the cost. The same debate is likely to be in focus in coming years, as the oil industry reacts to the latest crude-price plunge. Sometimes preserving the skills and talent of a workforce, where this is possible, would be far better in the long term than losing this experience and then having to try to re-hire it when the clouds lift.

Where they can, amid the current crisis, companies should stand by their employees, not just because it is the right thing to do but because this will give them the best chance of prospering when the recovery comes.

On the executive pay front, the big problem over the last two decades has been that, amid a growing obsession over linking pay with performance, remuneration levels for big company directors have spiralled in absolute terms. And there has been a burgeoning bonus culture not just at this top level but at other tiers of management.

Annual bonuses and supposed long-term incentive plans (LTIPs), often Byzantine in style, have further encouraged the type of short-term decision-making that some company bosses with short attention spans seem prone to in any case.

LTIPs tend to relate to rolling three-year periods. To view three years as long term, in the scheme of things in the corporate world, is a total nonsense.

The bonus culture has fuelled short-term cost-cutting to the detriment of long-term performance and investment. To put it simply, it has encouraged the wrong type of behaviours.

Much has been made of big changes to society and the economy in the wake of the coronavirus tragedy.

History would suggest most things will return to normal.

Among the things most likely to return to normal is unfettered remuneration for big company bosses.

Looking at the High Pay Centre numbers, there has not been so much departure from normality on this front in any case, even amid the crisis. But there has been some. And this should be viewed as an opening of the door to broader change on the executive pay front when the worst of the crisis has passed.

It must not be business as usual on executive pay. We need to take a good look at what is an appropriate level of remuneration for big company bosses. In too many cases, it looks utterly excessive. Crucially, we should also look at linking remuneration to some longer-term good. We should examine how bonuses might be linked to the well-being of the workforce and society and, where appropriate, the environment, as well as to the long-term business performance.

This could all be to the good of companies, by preventing them from making poor decisions focused on the short term and irritating customers who will be focusing keenly on companies’ treatment of employees and broader attitudes to society and the environment.