Business Chiefs' Pay Soaring Despite Coalition Restraint Efforts

Coalition Still Failing To Stop Fat Cat Pay Booming
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Chief executives are still enjoying "runaway" growth in the size of their pay packets despite coalition efforts for restraint, a new study has found.

The average pay for chief executives in 67 companies studied was £4.5 million last year, according to the High Pay Centre. This marked an increase from the £4.3m recorded by pay researcher Manifest/MM&K in 2012.

The findings will make uncomfortable reading for business secretary Vince Cable, who has regularly called for restraint in how much companies pay their executives. Meanwhile others, like chancellor George Osborne, previously railed against "unacceptable" banker bonuses.

Recently shareholders have revolted against executive pay on a number of occasions since the coalition required companies to publish more information and gave shareholders a binding vote on pay policy. However, no company in the FTSE 100 top tier has seen a majority of shareholders vote down pay for chief executives in the last months of 2013.

The centre's director, Deborah Hargreaves, said: "These figures show that the new regulations are not enough to bring top pay back to a level that is sensible, fair or proportionate.

"Over the past 15 years, pay for a FTSE100 chief executive has gone from being 60 times the average UK worker to 160 times, without any justification.

"All workers should share in a company's success - our economy cannot succeed in the long-term if a tiny group at the top pull further and further away from everybody else."

TUC general secretary Frances O'Grady said: "Chief executives' pay has continued to race away at a time when the wages of their workforces are barely keeping up with the cost of living.

"For all the tough talk on curbing fat cat excess, the Government's policies are simply too weak. This failure to stop rising inequality could lead to another economic crisis."

Bank of England governor Mark Carney last week savaged bankers' over how "disturbingly" rich they had become, in an attack on City greed.

Carney said globalisation had resulted in huge earnings which were "amplifying the rewards of the superstar" while "disturbing evidence" suggested opportunities for social mobility were narrowing.

The governor said in the run-up to the crisis "banking became about banks not businesses" while financial products designed to meet the needs of firms "morphed into ways to amplify bets on financial outcomes".

"When bankers become detached from end-users, their only reward becomes money. Purely financial compensation ignores the non-pecuniary rewards to employment, such as the satisfaction from helping a client or colleague succeed."

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