UK

Public 'want top pay reined in'

  • 29 January 2012
  • From the section UK
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London skyline
Image caption Pay among City executives is under scrutiny

Few people believe that top bosses should be paid more than £1m a year, according to a survey.

The ICM poll of 2,000 adults also found two-thirds wanted wider representation from staff on remuneration committees.

It was commissioned by the High Pay Centre, an independent pressure group which monitors executive pay.

The findings come as Royal Bank of Scotland chief executive Stephen Hester faces continuing pressure to turn down a bonus of £1m in shares.

Sir Philip Hampton, who is chairman of the mainly publicly-owned bank, has given up a £1.4m shares reward he was due in February.

The poll found just 7% of respondents supported pay above £1m a year and 70% were in favour of "binding powers" for shareholders to block pay packages for top executives.

Deborah Hargreaves of the High Pay Centre called for changes to restore trust in business.

"Top executive pay and the behaviour of business are issues at the heart of the current public debate about how we rebuild our economy," she said.

"Our polling shows the public do not believe executives, even of the biggest companies, should be awarded multi-million-pound pay packages.

"It is time for boardrooms to wake up to what is fair and act now to rebuild public trust."

She called for "bold action" to end the disparity between what top executives and average workers earned.

The poll, from a random sample of 2,003 adults, also revealed that only 1% of respondents said senior bosses were worth the £4m currently earned at the very top.

Ms Hargreaves added: "The public are squarely behind the case for reform. People want to see rewards based on fairness.

Image caption Vince Cable set out the government's plans on executive pay in the Commons last Monday

"Runaway executive pay has undermined the public's trust in business and we believe Parliament and the business community should take stronger action to curb it."

But Margaret Doyle, a financial columnist for Reuters Breakingviews, said some executives do deserve to be well paid.

"The job they do is a demanding one that requires a very specific and rare skill-set, and when you get to these very senior levels, the pool of people who can do these jobs is quite small.

"But I do have some sympathy for what the High Pay Centre is saying because there has been a huge escalation in the last 20 or 30 years in the pay at the top of companies and the link between that increase and underlying performance is far from clear."

Last week Business Secretary Vincent Cable outlined plans to curb excessive boardroom pay, promising more transparency and power for shareholders to veto big bonuses.

He said the government could not continue to see chief executives' pay rising while the performance of companies languished well behind.

The High Pay Centre said it welcomed the proposals for more shareholder powers, but argued they did not go far enough.

The High Pay Centre was recently established by Ms Hargreaves, who chaired the High Pay Commission during its year-long inquiry into executive pay.

The centre's stated aim is to "monitor pay at the top of the income distribution and research into other key areas of business reform."

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