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Business Comment

David Prosser: The case against fat cat pay has to be accurate

Outlook It is fair to say the short statement made yesterday by MM&K, the pay consultants, has produced fewer column inches than its pronouncement on Monday – a report on executive pay that received blanket coverage because it exposed fat cat directors ashaving received huge salary hikes last year, while their staff got almost nothing. Yesterday's statement revealed it had cocked up the figures on the pay of the manfingered as one of the biggest earners of 2010. It turns out Icap boss Michael Spencer actually saw his pay fall by 40 per cent last year.

Anyone can make a mistake, but this is an unfortunate one – not so much because of the upset caused to Mr Spencer, who will no doubt get over it, but because it undermines the credibility of the case against executive pay.

If those who argue the rewards paid to directors are too divorced from performance – and what their staff earn – can't add up, it is much easier to brush off their criticism. That's a shame, for the wider point made by MM&K's analysis stands: shareholders need to hold directors to account on remuneration and if they do not, we may yet require some sort of legislation.