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.

News
The Edge and his wife, Morleigh Steinberg, at the Academy Awards in 2014
peopleGuitarist faces protests over plan to build mansions in Malibu
Sport
Cristiano Ronaldo in action for Real Madrid
football
News
i100
News
The comedian, 42, made the controversial comment following the athlete’s sentencing to five years for the culpable homicide of Reeva Steenkamp on Tuesday
peopleComedian's quip about Reeva Steenkamp was less than well received at music magazine awards
PROMOTED VIDEO
News
ebooksAn unforgettable anthology of contemporary reportage
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

SQL Developer with T-SQL, Watford, Hertfordshire - £350 - £360

£350 - £360 per day: Ashdown Group: SQL Developer with T-SQL, Watford, Hertfor...

Chief Financial Officer

120-150k: Accountancy Action: We are looking for an experienced CFO from a min...

IT Systems Business Analyst - Watford - £28k + bonus + benefits

£24000 - £28000 per annum + bonus & benefits: Ashdown Group: IT Business Syste...

Trainee Recruitment Consultant - Birmingham - Real Staffing

£18000 - £23000 per annum + Commission: SThree: The SThree group is a world le...

Day In a Page

How could three tourists have been battered within an inch of their lives by a burglar in a plush London hotel?

A crime that reveals London's dark heart

How could three tourists have been battered within an inch of their lives by a burglar in a plush London hotel?
Meet 'Porridge' and 'Vampire': Chinese state TV is offering advice for citizens picking a Western moniker

Lost in translation: Western monikers

Chinese state TV is offering advice for citizens picking a Western moniker. Simon Usborne, who met a 'Porridge' and a 'Vampire' while in China, can see the problem
Handy hacks that make life easier: New book reveals how to rid your inbox of spam, protect your passwords and amplify your iPhone

Handy hacks that make life easier

New book reveals how to rid your email inbox of spam, protect your passwords and amplify your iPhone with a loo-roll
KidZania lets children try their hands at being a firefighter, doctor or factory worker for the day

KidZania: It's a small world

The new 'educational entertainment experience' in London's Shepherd's Bush will allow children to try out the jobs that are usually undertaken by adults, including firefighter, doctor or factory worker
Renée Zellweger's real crime has been to age in an industry that prizes women's youth over humanity

'Renée Zellweger's real crime was to age'

The actress's altered appearance raised eyebrows at Elle's Women in Hollywood awards on Monday
From Cinderella to The Jungle Book, Disney plans live-action remakes of animated classics

Disney plans live-action remakes of animated classics

From Cinderella to The Jungle Book, Patrick Grafton-Green wonders if they can ever recapture the old magic
Thousands of teenagers to visit battlefields of the First World War in new Government scheme

Pupils to visit First World War battlefields

A new Government scheme aims to bring the the horrors of the conflict to life over the next five years
The 10 best smartphone accessories

Make the most of your mobile: 10 best smartphone accessories

Try these add-ons for everything from secret charging to making sure you never lose your keys again
Mario Balotelli substituted at half-time against Real Madrid: Was this shirt swapping the real reason?

Liverpool v Real Madrid

Mario Balotelli substituted at half-time. Was shirt swapping the real reason?
West Indies tour of India: Hurricane set to sweep Windies into the shadows

Hurricane set to sweep Windies into the shadows

Decision to pull out of India tour leaves the WICB fighting for its existence with an off-field storm building
Indiana serial killer? Man arrested for murdering teenage prostitute confesses to six other murders - and police fear there could be many more

A new American serial killer?

Police fear man arrested for murder of teen prostitute could be responsible for killing spree dating back 20 years
Sweetie, the fake 10-year-old girl designed to catch online predators, claims her first scalp

Sting to trap paedophiles may not carry weight in UK courts

Computer image of ‘Sweetie’ represented entrapment, experts say
Fukushima nuclear crisis: Evacuees still stuck in cramped emergency housing three years on - and may never return home

Return to Fukushima – a land they will never call home again

Evacuees still stuck in cramped emergency housing three years on from nuclear disaster
Wildlife Photographer of the Year: Intimate image of resting lions claims top prize

Wildlife Photographer of the Year

Intimate image of resting lions claims top prize
Online petitions: Sign here to change the world

Want to change the world? Just sign here

The proliferation of online petitions allows us to register our protests at the touch of a button. But do they change anything?