PM urged to act over top bosses' pay

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The Independent Online
Labour yesterday challenged John Major to act over "boardroom excesses" which have turned 50 directors of privatised utilities into millionaires. Gordon Brown, the Shadow Chancellor, said all 12 chairmen of the regional electricity companies had become millionaires through salary, share option and pension packages.

Half had become paper multi-millionaires, he said, and 63 directors of the electricity companies had £30m worth of share options between them - an average of £500,000 each. "This is the British Gas scandal 63 times over," he said.

Yesterday Mr Brown wrote to the Prime Minister in an attempt to exploit Cabinet divisions, charging that if Mr Major failed to act he was "condoning unfairness".

The Prime Minister has made clear he is unhappy at the impact of Cedric Brown's 75 per cent pay rise at British Gas and other big increases. However, Michael Heseltine, President of the Board of Trade, is believed to have argued against strengthening shareholders' ability to veto directors' and executives' pay and the Cabinet committee examining the issue appears to be stalled.

Mr Brown said the huge remuneration packages had been achieved not by the efforts of those involved but through their being in the right place at the right time when the utilities were privatised. The beneficiaries, he said, were "the something-for-nothing rich".

Mr Brown said Labour would table amendments to the Finance Bill to tax executive share options as income, to allow the regulator to cut prices where "boardroom excesses" occur and to have the "perks and handouts" in the boardroom fully disclosed in company accounts.

Labour will also propose the opening up of remuneration committees which decide senior pay, making their membership known and more representative. In addition shareholders' meetings would be reformed to provide shareholders with a stronger voice.

The moves would "force the Government to come off the fence on the scandal of salary excesses in privatised boardrooms", Mr Brown said.