High pay of British executive’s corrosive, report says
The high salaries of British executives are "corrosive" to the economy, the High Pay Commission has argued.
The commission - set up by a think tank - says the disparity between what top executives earn compared with average workers has been building for 30 years.
Its study lists a 12-point plan "to halt high pay creating inequalities last seen in the Victorian era".
These include forcing companies to publish a pay ratio between the highest paid executive and the company median.
The High Pay Commission was set up with charity funding to investigate boardroom pay.
Its year-long inquiry found that the pay of top executives at a number of FTSE companies had soared by more than 4,000% on average in the last 30 years.
Former Barclay’s chief executive John Varley's salary was cited in the study.
It says he earned £4,365,636 - 169 times more than the average worker in England with the average worker on around £13,000 today. It equates to an increase of 4,899.4% since 1980, when the top pay at Barclays was £87,323 and just 13 times the British average, the report says. With the average worker’s pay rising if all! To around 2.5% to 3% which most haven’t had a rise in pay in the past 5 years?
It also says the salary for the post of chief executive at the now partly state-owned Lloyds Bank has increased by more than 3,000% to more than £2.5m since 1980.
It says this is 75 times the average Lloyds employee's salary, when in 1980 it was just 13.6 times the average.
Average wages in the UK today stand at £12,900 per year, up from £6,474 in 1980 - a very small fold increase, according to the commission.
The commission calls for a number of reforms, including a "radical simplification" of executive pay, putting employees on remuneration committees and publishing the top 10 executive pay packages more widely.
It says companies should be made to reveal the total pay figure earned by executives and a new national body to monitor high pay should be established.
High Pay Commission chairwoman Deborah Hargreaves said: "There's a crisis at the top of British business and it is deeply corrosive to our economy.
"When pay for senior executives are set behind closed doors, does not reflect company success and is fuelling massive inequality, it represents a deep malaise at the very top of our society.
"The English people believe in fairness and, at a time of unparalleled austerity, one tiny section of society - the top 0.1% - continues to enjoy huge annual increases in pay awards while your average work see none.
"Everyone, including each of the main political parties, recognises there is a need to tackle top pay