Pay packets of top bosses soar as wage reform flops

Boardroom rewards on the rise despite measures to give investors more say

The Coalition’s efforts to crack down on the worst excesses of boardroom pay are having little impact and companies are flouting the spirit of the new regulations, according to the High Pay Centre.

The independent think-tank, a campaigner to cut the income gap between the super-rich and the rest of the workforce, analysed the pay of 67 FTSE 100 chief executives since new rules giving shareholders a binding vote on future pay policy came into force last October. It found that the average pay awarded in 2013 was £4.5m – up from the £4.3m recorded by fellow pay researcher Manifest/MM&K for 2012.

The findings come at a time of heightened political sensitivity over inequality as the economist Thomas Piketty’s Capital in the 21st Century, which claims that capitalism naturally widens the gap between rich and poor, takes the world by storm.

The Bank of England’s Governor, Mark Carney, also warned that a more unequal society was “amplifying the rewards of the superstar” as he pledged to help build a “more trustworthy” capitalism.

Although several major companies have seen significant rebellions on pay in recent months – such as Barclays, Standard Chartered and AstraZeneca – shareholders have not voted down either individual pay packages or future pay policy.

The highest-paid FTSE 100 chief executive last year was Sir Martin Sorrell, who was paid almost £30m last year.

The High Pay Centre also criticises the efforts of the UK’s biggest companies to skirt around requirements to compare pay increases for the chief executives with those given to their workforce.

Companies are allowed to choose a smaller group for comparison if they consider it appropriate, a loophole which has allowed the likes of British Airways’ owner, International Consolidated Airlines Group, to compare the pay of boss Willie Walsh with a pool of just 99 staff out of 60,000, the research says. The requirement has been “next to useless” in practice, the High Pay Centre claims.

Deborah Hargreaves, the centre’s director, said: “These figures show that the new regulations are not enough to bring top pay back to a level that is sensible, fair or proportionate. Over the past 15 years, pay for a FTSE 100 CEO has gone from being 60 times the average UK worker to 160 times, without any justification. All workers should share in a company’s success – our economy cannot succeed in the long-term if a tiny group at the top pull further and further away from everybody else.”

Outside the FTSE 100, shareholders have been more rebellious. The listed engineer Kentz had its pay policy shot down by investors at its annual meeting two weeks ago, becoming the first company to lose a binding vote on pay under the new rules.

Start your day with The Independent, sign up for daily news emails
PROMOTED VIDEO
News
ebooksNow available in paperback
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

Ashdown Group: Marketing Services Manager - (communications, testing, DM)

£32000 - £35000 per annum + benefits: Ashdown Group: Marketing Services Manage...

Guru Careers: Finance Account Manager

£Neg. (DOE) + Excellent Benefits: Guru Careers: A Finance Account Manager with...

Ashdown Group: Java Developer - Hertfordshire - £47,000 + bonus + benefits

£40000 - £470000 per annum + bonus: Ashdown Group: Java Developer / J2EE Devel...

Ashdown Group: Direct Marketing Manager - B2C, Financial Services - Slough

£45000 - £55000 per annum + Benefits: Ashdown Group: An exciting opportunity h...

Day In a Page

Jeb Bush vs Hillary Clinton: The power dynamics of the two first families

Jeb Bush vs Hillary Clinton

Karen Tumulty explores the power dynamics of the two first families
Stockholm is rivalling Silicon Valley with a hotbed of technology start-ups

Stockholm is rivalling Silicon Valley

The Swedish capital is home to two of the most popular video games in the world, as well as thousands of technology start-ups worth hundreds of millions of pounds – and it's all happened since 2009
Did Japanese workers really get their symbols mixed up and display Santa on a crucifix?

Crucified Santa: Urban myth refuses to die

The story goes that Japanese store workers created a life-size effigy of a smiling "Father Kurisumasu" attached to a facsimile of Our Lord's final instrument of torture
Jennifer Saunders and Kate Moss join David Walliams on set for TV adaptation of The Boy in the Dress

The Boy in the Dress: On set with the stars

Walliams' story about a boy who goes to school in a dress will be shown this Christmas
La Famille Bélier is being touted as this year's Amelie - so why are many in the deaf community outraged by it?

Deaf community outraged by La Famille Bélier

The new film tells the story of a deaf-mute farming family and is being touted as this year's Amelie
10 best high-end laptops

10 best high-end laptops

From lightweight and zippy devices to gaming beasts, we test the latest in top-spec portable computers
Michael Carberry: ‘After such a tough time, I’m not sure I will stay in the game’

Michael Carberry: ‘After such a tough time, I’m not sure I will stay in the game’

The batsman has grown disillusioned after England’s Ashes debacle and allegations linking him to the Pietersen affair
Susie Wolff: A driving force in battle for equality behind the wheel

Susie Wolff: A driving force in battle for equality behind the wheel

The Williams driver has had plenty of doubters, but hopes she will be judged by her ability in the cockpit
Adam Gemili interview: 'No abs Adam' plans to muscle in on Usain Bolt's turf

'No abs Adam' plans to muscle in on Usain Bolt's turf

After a year touched by tragedy, Adam Gemili wants to become the sixth Briton to run a sub-10sec 100m
Calls for a military mental health 'quality mark'

Homeless Veterans campaign

Expert calls for military mental health 'quality mark'
Racton Man: Analysis shows famous skeleton was a 6ft Bronze Age superman

Meet Racton Man

Analysis shows famous skeleton was a 6ft Bronze Age superman
Garden Bridge: St Paul’s adds to £175m project’s troubled waters

Garden Bridge

St Paul’s adds to £175m project’s troubled waters
Stuff your own Christmas mouse ornament: An evening class in taxidermy with a festive feel

Stuff your own Christmas mouse ornament

An evening class in taxidermy with a festive feel
Joint Enterprise: The legal doctrine which critics say has caused hundreds of miscarriages of justice

Joint Enterprise

The legal doctrine which critics say has caused hundreds of miscarriages of justice
Freud and Eros: Love, Lust and Longing at the Freud Museum: Objects of Desire

Freud and Eros

Love, Lust and Longing at the Freud Museum