Britain's most powerful trade unions stepped up their campaign to force the Government to crack down on excessive boardroom pay yesterday and backed the findings of The Independent's survey of the worst examples of pay for failure among the UK's largest companies.
Amicus, the Transport and General Workers' Union and the Trades Union Congress called on the Government to bring in legislation to halt massive pay-offs for directors who have been ousted.
Jack Dromey, the national organiser of the Transport and General Workers' Union, said the research by The Independent represented an "outstanding advocacy" of the argument that only intervention by the Government would put a stop to the lavish rewards companies are handing to their top executives. "We welcome this research which shows the grotesque contrast between fat-cat salaries, pensions and payments for failure for companies' bosses and the treatment of thousands of workers whose pensions are at risk," Mr Dromey said.
The Independent surveyed every company in the FTSE 100, comparing the pay of chairmen and chief executives with the value they returned to shareholders over the past three years. The findings showed that in many cases there was no correlation between rewards and the shareholder returns.
On Monday there was an unprecedented rebellion by GlaxoSmithKline shareholders against the remuneration package of the company's chief executive, worth up to £23m.
Derek Simpson, general secretary of Amicus, Britain's largest manufacturing union, said the Independent's study and the shareholder rebellion served as a warning to other companies that "they will come under closer scrutiny from shareholders, employees and the media".
Glaxo attempted to assuage investors' anger by signalling that it would scale back Jean-Pierre Garnier's package. A number of directors are also set to lose their jobs later this year in a boardroom reshuffle.
Mr Garnier and other Glaxo directors could probably afford to take a pay-cut. In the past three years, Mr Garnier and three other directors at Europe's biggest drugs company have taken home £16m for their work in UK boardrooms. The others are the chairman Sir Christopher Hogg, who looks under pressure after the highly embarrassing vote, Sir Roger Hurn, the deputy chairman, and the finance director John Coombe.
Sir Adrian Cadbury, the City grandee who wrote a highly influential code of practice more than 10 years ago, welcomed the revolt by Glaxo's shareholders. "I am pleased to see investors accepting their responsibility. They have been slow to do it," he said.
The Government has made it clear that it is unwilling to introduce legislation and backs Sir Adrian's views - set out in the Combined Code - that it is up to shareholders to police the companies they hold stakes in.
More showdowns between shareholders and company boards are expected in the new few weeks. The powerful National Association of Pension Funds said the chemicals giant ICI, Rolls Royce and the stock broker Collins Stewart are on its hit list.
Peter Boreham of the pay advisers, Hay Group, said: "Last year was a pretty bad year, so it makes you wonder why the bonuses paid, especially to many in top 100 companies, were so high."
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