James Moore: Pensions profiting from politics of immorality

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The Independent Online

Outlook It's time for executive racket number two. Yesterday I wrote about the way shareholders are regularly short-changed by executive retention schemes which benefit only the useless (if the beneficiaries are any good the schemes get bought out by their new employers).

While that's clearly an example of bad practice, if not an out-and-out con, it pales by comparison with the pension arrangements of some of Britain's best-paid bosses.

Headline pay packages have been under scrutiny like never before. A few undeserving executives have even been pressured to hand back their annual bonuses (but never their long-term incentive plans).

Pension arrangements, however, have passed by with relatively little comment. That really ought to change because it's not only Fred Goodwin who drove his company into a brick wall and was then able to head off to France with what was still a bumper pension, even if he did give a bit back.

Tomorrow the TUC publishes its annual PensionsWatch survey and it promises to make interesting reading.

Critics might say the TUC is bound to be critical. But previous editions have concentrated on the numbers, which, with a bit of detective work, one can generally unearth after a few hours' study of an annual report.

Given that British business appears to feel its leaders should win big in the good times and win marginally less big in the bad times, there's a high likelihood that the survey won't have found a sudden outbreak of good practice from the remuneration committees that design executive pension schemes with the help of consultancy firms with an eye on winning more business.

"That's the politics of envy," the right will no doubt cry if people get cross. It isn't the politics of envy, though, or anything like it. When the people at the top of under-performing organisations slash benefits for those below while pocketing pay rises for doing so it's more like the politics of immorality.