By Marcus Leach
The High Pay Commission published their report into the salaries of UK executives today (Tuesday), stating that they are 'corrosive' to the country's economy.
Set up by a think tank the Commission argue in their report, Cheques with Balances: Why tackling high pay is in the national interest, that the disparity between what top executives and average workers earn has been building for 30 years.
The report goes on to outline a twelve-point action plan aimed at stopping "high pay creating inequalities last seen in the Victorian era".
The 12 recommendations of the report are:
1 - Pay basic salaries to company executives
2 - Publish the top ten executive pay packages outside the boardroom
3 - Standardise remuneration reports
4 - Require fund managers and investors to disclose how they vote on remuneration
5 - Include employee representation on remuneration committees
6 - All publicly listed companies should publish a distribution statement
7 - Shareholders should cast forward-looking advisory votes on remuneration reports
8 - Improve investment in the talent pipeline
9 - Advertise non-executive positions publicly
10 - Reduce conflicts of interest of remuneration consultants
11 - All publicly listed companies should produce fair pay reports
12 - Establish a permanent body to monitor high pay
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 risen by more than 4,000% on average in the last 30 years.
“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," High Pay Commission chair, Deborah Hargreaves, said.
One case in point highlighted in the study was that of former Barclays chief executive John Varley.
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.
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