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Disgusting and morally bankrupt
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Posted November 22, 2011 at 6:46AM
From Today's Herald
TOP executive pay in Britain has spiralled out of control with increases over the past 30 years of more than 4000%, a new report claims today.
The year-long inquiry into the issue claims excessively high wages are corrosive to the economy and damaging trust in business.
While the average annual wage of a UK worker has risen almost four-fold since 1980 to £25,900, top salaries have “spiralled alarmingly to stratospheric levels” in some of the country’s biggest companies, claims the High Pay Commission.
John Varley, the former chief executive of Barclays, earned £4,365,636 – 169 times the average income and a rise of 4899.4% since 1980 when the top wage in Barclays was just 13 times the UK average.
In another example, the chief executive in the now part state-owned Lloyds Bank has seen his pay increase by 3141.6% to £2,572,000 over the same period – 75 times the average Lloyds employee – when in 1980 it was just 13.6 times the average.
The report points out that in 1979 the top 10% took home 28% of the national income. By 2007 they took home 40%.
It projects that by 2035 the top 0.1% of British workers will take home 14% of the national income – equivalent to the situation in Victorian times.
In the last year alone, as economic growth has slowed down, executive pay in the FTSE-100 companies rose on average by 49% compared with just 2.7% for the ordinary worker.
Brendan Barber, general secretary of the TUC, said: “Top directors seem to think that austerity is just for the little people. This is not just unfair but bad for the economy as this vital report makes clear.”
He added: “The truth is that the extraordinary transfer of wealth from ordinary people to those at the top is not just morally repulsive but was a key ingredient in the economic crash.”
Yesterday, at the CBI’s annual conference in London, its president, Sir Roger Carr, called for an end to the “demonisation” of Britain’s banks and other businesses, claiming reports about the high level of pay for directors were “misleading”.
He stressed that, like the public, he did not approve of rewards for failure and high pay for mediocrity.
“If we are to ensure that business is both respected in society and the career destination of choice for our young and talented people, we must act responsibly in the way we pay ourselves, govern ourselves and conduct ourselves in every respect of our business lives,” insisted Sir Roger, who is chairman of Centrica.
However, a poll of more than 2000 people to coincide with the commission’s report found that four out of five believed pay and bonuses for top executives were out of control.
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Posted November 22, 2011 at 8:17AM
When I started working full time in 1988 the top man in the company, in charge of 25,000 staff, earned approx 15 times the hourly rate of the lowest paid employee. I know this because it was published in the annual financial report, which the company handed to the union for checking, and it was then distributed to staff.
In contrast, the company I now work for is a lot more shady about finances. Senior executives are compensated via trusts, and a lot of our income is from top secret US military projects that are not funded directly by government, so the figures cannot be released.
As luck would have it though, our top man is listed in the Forbes rich list, and from the data there I can tell you his annual compensation for 2009, including pension payments and share options, was almost exactly 1,000x my salary for that year.
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Posted November 22, 2011 at 10:10AM
Moan all you want, but that is what the majority of people want.
That's why they voted in a Conservative coalition.
I am a true blue Tory, and always have been, but I am under no illusions that if you want anything done about big business you don't vote Conservative, just as you don't vote Labour if you want the unions curbed.
Policies and manifestos change, but basic principles don't.
This is democracy, British style, in action.
We voted for them (no, I didn't either) now we must live with the consequences.
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Posted November 22, 2011 at 6:56PM
This is a rather inflaming thread title. After all, how do we know that the same people were in charge 30 years ago?
Also, the use of Brendan Barber to comment is (as others have noted) slightly entertaininng given that he is not exactly on the breadline.
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Posted November 22, 2011 at 8:46PM
The report is from the very commission charged with investigating disparity in salaries, its hardly inflammatory to hear the truth.
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