Public 'want top pay reined in'

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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.

Start Quote

Some executives do deserve to be paid very well”

End Quote Margaret Doyle Financial columnist

"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.

Business Secretary Vince Cable 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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  • rate this

    Comment number 468.

    People should be rewarded according to the value of what they produce or the service they provide to others.

    Bankers,lawyers and politicians produce nothing of value and exist mostly to serve themselves.

    Food growers and nurses provide products and services of great value and benefit to us all.

    When it comes to reward - the whole system is upside down.

  • rate this

    Comment number 454.

    I have no problem with "top bosses" earning more than £1m - if under their leadership the company is making a good profit. Their salary, however, should be linked to those profits with a contractual minimum and maximum pay. If the company is doing well they can have their high pay. If profits are low, no more than £50,000. And no bonuses simply for doing the job they're employed to do!

  • rate this

    Comment number 270.

    I used to get a bonus - its size varied with the profits made by the company that year. Sometimes it was nothing. Often a hundred pound or two. Once - once - 15% of my salary. My Company decided 4 years ago that we didn't respond to bonuses, but what we wanted was a pat on the back and a piece of paper saying we had done well. Except for the directors who still need and get bonuses.

  • rate this

    Comment number 245.

    £1m saved from excutive pay would be available to company profits and hence dividends or reinvestment in the company. The tax impact would in all likelihood be neutral, perhaps even beneficial if the reinvestment leads to more jobs. We have to get away from this fallacy that anyone is worth over £1m because they 'work hard'. 99% of us work hard and make do with less.

  • rate this

    Comment number 189.

    We have to ask ourselves the question, can we afford not to award high executive pay deals. Cutting pay for senior managers will act a huge disincentive for people to work hard to make their compnaies profitable and we run the risk of losing talent to other big financial centres such as New York and Hong Kong, were tax rates for high earners are as little as 18%.


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