My opening point was that a time when our members are suffering a pay freeze and attacks on their pensions, they would welcome a pay rise in line with inflation - 5%, never mind 50%. These directors are same people who want to end unfair dismissal rights and cut workers pay and pensions in the public and private sector. They have no shame as they get together to award each other pay, bonuses and massive pensions.
I also had the opportunity to correct some myths.
- There is no real link here with performance. CEO pay has quadrupled in the last ten years, while share prices have fallen.
- No they won't be poached by overseas companies. Only one FTSE 100 CEO has been poached in this way in past 5 years, and that was by another UK company. 60% of appointments are internal and turnover is only 6% - half the national average.
- They won't move overseas. We were told a few weeks ago that banks will move to the Cayman Islands. Well I would like to see their taxpayers finance the next bailout.
So what are the solutions. Capping wages, possibly as a multiplier of the lowest pay would be one solution. Progressive taxation is another. The High Pay Commission is looking at some structural solutions including:
Transparency: more publicly available information and meaningful disclosure.Accountability: how pay at the top can be made more accountable through reforms of the Remuneration Committees and the inclusion of other stakeholders.
Fairness: The British public have a deep and ingrained sense of what is fair. When it comes to pay at the top, this is fundamentally about playing by the rules. Need reforms that could engage greater fairness in relation to pay.
It is that last point I would finish on. This isn't just an issue for the companies concerned and their shareholders. It is an issue that affects us all. We know that more equal societies to better on almost every measure. Top Directors pay is an important part of the drift towards a less equal society in the UK, and we are paying a big price for not tackling this issue.