There's no good reason to delay this overhaul

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The Independent Online

Ping. A press release from the British Chambers of Commerce, subject: executive pay. Director general John Longworth opines: "Setting levels of executive pay is a matter for companies, their boards, and their shareholders, not politicians. At such a crucial time for the UK economy, ministers' focus should move swiftly on to the core issues: creating jobs and growth."

Sounding like a man desperately pleading that no one interrupt the flow of the gravy train, he insists there are "far more pressing issues than executive pay".

There probably are, but it is possible for governments to do more than one thing at a time.

If the structures that determine what chief executives get paid aren't functioning properly, there's no good reason to delay an overhaul. And there's plainly not the slightest chance of those changes being led by the BCC. (Gravy. Train.) Which means it probably has to come from elected officials.

Vince Cable's rather mild proposal is that shareholder votes on executive pay should be binding, replacing the present arrangement which leaves boards entirely free to ignore the wishes of the owners, which they usually do.

Defenders of executive pay deals like to bang on about global competitive forces and the supposedly relentless need to attract the top, ie most expensive, talent. But if executive pay were truly a function of market forces it would sometimes go down. That it never does tells us that it's a stitch-up, a transfer of wealth from pension funds to already rich individuals.

Pay packages for FTSE 100 chief executives have quadrupled since 1998 – from an average of £1m to £4.2m.

Was that chief executive being ripped off in 1998? Or is he four times more brilliant than he used to be? Even the BCC must be able to see that either proposition is absurd on its face. The other thing is that Mr Longworth is wrong to imagine that there's no connection between unreasonable levels of reward for the top brass and economic growth. It's not a side issue to be ignored until times are easier, it should be looked at now.

If a substantial portion of the population think the economy is a giant Ponzi scheme run on behalf of a tiny minority, which they do, that's got to affect behaviour and consumer confidence, not to mention general happiness.

If half the nation thinks that it is barely possible for them to improve their own circumstances no matter how hard they work, you have both a dysfunctional society and a malfunctioning economy.

If executive pay came down notably, or at least seemed to respond to wider issues in a meaningful way, Britain might seem like a fairer place. Wouldn't that be good for growth?

If executive pay were truly a function of market forces it would sometimes go down

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