Sir Desmond Pitcher, of North-West Water where typists are paid £4.30 an hour, told the House of Commons Employment Committee that only shareholders should be told how much directors earned.
"The company is owned by the shareholders and we have a responsibility to tell them what directors are receiving. That is as far as the matter goes. It is not a matter for the general public to debate." Holders of equity elected the board and its remuneration committee of non-executive directors decided pay. Thus, share owners could exercise influence.
Sir Desmond angered the committee by refusing to divulge the identity of recipients of £60,000 in donations, on the grounds that it had nothing to do with directors' remuneration. He said the payments were irrelevant to the committee's investigation and insisted that none of the money went to organisations in which he held a post. The cash was given to organisations involved in improving the environment and recreational facilities. There were no political donations.
Sir Desmond said that any public concern over the pay of directors of utilities was misconceived and based on misinformation purveyed by the press.
Sir Desmond rounded on the Labour Party's estimate of how much North West directors stood to gain in terms of share options. He said Gordon Brown, the shadow Chancellor, displayed a lack of understanding of share options and that a gain of £4.9m to board members was incomprehensible. At present prices, directors stood to make only £525,000.
Sir Desmond said he was paid a basic salary of £250,000 last year, plus a £75,000 discretionary bonus, plus other benefits for a 50- to 70-hour week. He also received about £18,000 a year for the chairmanship of the Merseyside Development Corporation, for whom he worked 45 hours a month. A non-executive directorship of NatWest also brought in a further £8,000. He told MPs he had incurred a drop in salary to join North West, and his equivalent in France earned £2m a year.
A Labour Party analysis showed that senior executives in privatised utilities were paid an average £4,937 a week, or £130 an hour. Harriet Harman, Labour's employment spokeswoman, said the figures showed "how obscene" the divide between top earners and the rest of society had become under the Conservatives. "While top executives enjoy telephone- number salaries, thousands of families in Britain are struggling just to make ends meet," she said.Reuse content