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High pay of UK executives corrosive, report says | High pay of UK executives corrosive, report says |
(40 minutes later) | |
The high salaries of UK executives are "corrosive" to the economy, the High Pay Commission has argued. | The high salaries of UK executives are "corrosive" to the economy, the High Pay Commission has argued. |
The commission - set up by a pressure group - says the disparity between what top executives and average workers earn has been building for 30 years. | The commission - set up by a pressure group - says the disparity between what top executives and average workers earn has been building for 30 years. |
href="http://highpaycommission.co.uk/wp-content/uploads/2011/11/HPC_final_report_WEB.pdf" title="Link to High Pay Commission report" >Its study lists a 12-point plan to stop "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. | 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 by pressure group Compass, with backing from the Joseph Rowntree Charitable Trust, to investigate boardroom pay. | The High Pay Commission was set up by pressure group Compass, with backing from the Joseph Rowntree Charitable Trust, to investigate boardroom pay. |
Its year-long inquiry found that the pay of top executives at a number of FTSE companies had risen by more than 4,000% on average in the last 30 years. | Its year-long inquiry found that the pay of top executives at a number of FTSE companies had risen by more than 4,000% on average in the last 30 years. |
Richard Evans, president of PepsiCo in the UK and Irish Republic, told the BBC that the UK has to be competitive with the rest of the world. | Richard Evans, president of PepsiCo in the UK and Irish Republic, told the BBC that the UK has to be competitive with the rest of the world. |
"If we want great people to come and work in the UK, given it's a global talent pool, we've got to be prepared to pay the amount of money that those executives can get elsewhere in the world," he said. | "If we want great people to come and work in the UK, given it's a global talent pool, we've got to be prepared to pay the amount of money that those executives can get elsewhere in the world," he said. |
'Radical simplification' | 'Radical simplification' |
Former Barclays chief executive John Varley's salary was cited in the study. | Former Barclays chief executive John Varley's salary was cited in the study. |
It said he earned £4,365,636, which was 169 times more than the average worker in Britain 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 UK average, the report says. | It said he earned £4,365,636, which was 169 times more than the average worker in Britain 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 UK average, the report says. |
But Barclays has disputed this figures, saying they could not reconcile it with actual figures for Mr Varley's pay. | But Barclays has disputed this figures, saying they could not reconcile it with actual figures for Mr Varley's pay. |
The High Pay Commission 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% since 1980 to more than £2.5m. | The High Pay Commission 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% since 1980 to more than £2.5m. |
It says this is 75 times the average Lloyds employee's salary, when in 1980 it was just 13.6 times the average. | It says this is 75 times the average Lloyds employee's salary, when in 1980 it was just 13.6 times the average. |
A spokesperson for Lloyds Banking Group said: "We have requested the data from the High Pay Commission as we believe this report to be misleading. We are unable to reconcile the numbers." | A spokesperson for Lloyds Banking Group said: "We have requested the data from the High Pay Commission as we believe this report to be misleading. We are unable to reconcile the numbers." |
'Radical simplification' | 'Radical simplification' |
Average wages in the UK today stand at £25,900 per year, up from £6,474 in 1980 - a three-fold increase, according to the commission. | Average wages in the UK today stand at £25,900 per year, up from £6,474 in 1980 - a three-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. | 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. | 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. | 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 is 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. | "When pay for senior executives is 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 British 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. | "The British 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. |
"Everyone, including each of the main political parties, recognises there is a need to tackle top pay." | "Everyone, including each of the main political parties, recognises there is a need to tackle top pay." |