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Company directors pocket pay rises of 16 per cent

Company directors are receiving average pay increases of 16 per cent, more than four times higher than the percentage increases going to most workers, according to a report published today. The union-funded Labour Research Department (LRD), which conducted the study, accused quoted companies of "turning a deaf ear" to the recommendations of the Greenbury Committee.

The double-figure increases come at a time when average earnings in the economy are rising at around 4 per cent and headline inflation is moving up at 3.3 per cent. Fresh revelations about "fat cat" pay will fuel inflationary pressures already discerned in the labour market.

Some of the largest pay packets are to be found in private limited companies. LRD traced 23 directors who were paid more than pounds 2m last year.

City firms also tend to dominate the high pay league with 270 directors on pounds 500,000 or more, 51 of whom received in excess of pounds 1m. Nicholas Roditi, a UK-based adviser to George Soros, the New York financial guru, reportedly earns pounds 80m a year. The LRD calculates he is Britain's biggest earner.

Among the big hitters are celebrities who are directors of their own companies. Pop musician Elton John received pounds 5.5m - a 241 per cent rise - and the earnings of rock star Sting leapt by 659 per cent to pounds 10.2m.

Despite Sir Richard Greenbury's call for boardroom "sensitivity" when setting the pay of directors, of the 186 top earners in public companies traced by the research organisation, 110 were awarded increases of more than 10 per cent. Some 35 of them are now on more than pounds 1m a year.

The two biggest rises in quoted businesses went to directors of Allders, the stores group. Harvey Lipsith's 223 per cent rise to pounds 736,000 included a pounds 500,000 "special payment" on the sale of the group's subsidiary Allders International. Anthony Collyer, who has since left the company, enjoyed an increase of 203 per cent to pounds 552,000, again largely because of a special payment.

Next in the league came Roger Head, who retired from defence manufacturer Vickers after his pay and benefits jumped by 122 per cent to pounds 659,994.

Among the highest earners in publicly quoted companies were Jim Fifield of music group EMI, on pounds 5.8m, and Sam Chisholm, who was paid pounds 3.8m before leaving British Sky Broadcasting.

Overall in public and private companies, LRD found 123 directors on more than pounds 1m a year, compared with 97 in last year's survey. Some 418 got more than pounds 500,000 compared with 339 last time.

Pay among directors of private companies tends to be volatile with an average rise of 20 per cent last year comparing with 1 per cent in the previous year. The clearest example of volatility, according to LRD, was Mohamed Pervez, chairman of Bestway, the cash and carry group, whose 1,208 per cent rise rocketed him to pounds 3.113m from just pounds 238,000 the previous year. In 1994 his total pay was given as pounds 2.752m.

While increases in average earnings are still at a relatively modest level, Income Data Services reported yesterday there were signs that settlements were beginning to respond to a higher inflation rate.

More than half of deals in recent weeks were in the 3 to 4 per cent range with indications that they were set to move substantially higher in response to the Retail Price Index.

Top ten directors' pay increases

Director Company Pay (pounds ) % increase

(year ending) Harvey Lipsith Allders (9.96) 736,000 +222.8

Anthony Collyer Allders (9.96) 552,000 +203.2

Roger Head Vickers (12.96) 659,944 +121.7

Jean Pierre-Garnier SmithKline 1,965,000 +107.5

Beecham (12.96)

Mike Smith Ladbroke (12.96) 800,000 +98.5

Carol Galley Mercury Asset 2,211,000 +97.9

Management (3.97)

Johnathan Leslie RTZ (12.96) 632,000 +90.9

Robert Adams RTZ (12.96) 701,000 +80.2

James Walsh Laura Ashley (1.97) 648,000 +80.0

Stanley FInk ED & F Man (3.97) 969,000 +78.4