Greenbury in `fat cat' row

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The Independent Online
TWO of Britain's most eminent businessmen who have warned against excessive boardroom pay are accused of presiding over "fat cat" share option schemes at their own blue chip companies in recently submitted union wage claims, writes Barrie Clement.

In contrast with the "moderate" pay rises enjoyed by employees, a senior union negotiator points to the "excessive" earnings of directors at the chemicals giant ICI, and the pharmaceuticals group Zeneca.

Sir Richard Greenbury, who chaired a committee into top pay three years ago, is also chairman of the remuneration committee at Zeneca, and Sir Ron Hampel, chairman of ICI, was the author of a report into corporate governance published last August.

The criticism of boardroom pay polices at ICI and Zeneca emerge at a time when ministers are considering intervention to enforce moderation. Last week an Institute of Management report showed that the gulf between the boardroom and the shopfloor was continuing to widen, with directors enjoying an average pay rise of 10.2 per cent - up from 7.9 per cent last year - compared with a 4 per cent growth in earnings elsewhere.

In wage claims submitted to ICI and Zeneca, Fred Higgs, a senior national official at the Transport and General Workers' Union, points to a gulf between the increases his members are expecting and the "huge" sums yielded by share option schemes.

At ICI, Mr Higgs says that his members had to justify a pay increase in terms of their productivity. In the wage claim it was pointed out that three directors received ex-gratia payments instead of share options because they were aware of unpublished price-sensitive information. The union complains that the payments were in anticipation of share performance over the next three years and were paid out regardless of competence or whether the executives stayed at the company.