ANOTHER VIEW: Come clean on pay and perks

Share
Related Topics
It seems British company directors are not content with awarding themselves huge pay rises. Now we see that they have also awarded themselves massive perks in the form of generous share option schemes. From this money-spinner the typical manager is receiving £61,000. But some are getting more - like PowerGen's chief executive, Ed Wallis, who has received an enormous £1.2m. What is not widely known is that executives can exercise discretionary share option schemes up to a value four times their salaries. This is outrageously high. And because of the tax relief attached to these schemes, this particular loophole is costing British taxpayers a staggering £50m a year. Just think how much more usefully that money could be spent - on health or education, for example.

I am not in the business of preaching the politics of envy. The TUC backs proper reward for excellence, and people being paid well for their efforts. We are not opposed to share option schemes per se, nor do we want a legal ceiling on top pay. What we dowant is pay and perks that are set openly and fairly, and that are justified by performance. The Income Data Services study shows that these share option scheme payouts bear little relation to company or individual performance.

The whole business makes me wonder just how much time and energy directors and chief executives are putting into their own interests rather than in attending to real company business. It seems to be yet one more example of short-termism. These fancy share option schemes encourage top directors to look for policies which maximise the company's share price in the short term, rather than pursue long-term growth strategies. Companies with ambitious investment and research and development plans have their shares marked down by the City.

Good leaders take their workforces with them. If chief executives are seen to be motivated by personal greed, they undermine the commitment and morale of the staff they employ. Increasing income inequality drives a wedge between the leaders and their staff. That's not the recipe for successful business.

It is disingenuous for top directors to claim there are no objections from staff to their huge salaries and generous perks. Staff are often not aware of the amounts, and even when they are, it is not easy for them to protest.

The TUC wants to see a legal duty on companies to publish full details of pay and perks, such as top-flight pension schemes and executive share options, in an annual report to staff and shareholders. Putting employees or their union representatives on remuneration committees would bring a dose of common sense to their decisions.

Otherwise, in the inimitable words of former Trade and Defence minister, Alan Clark, it seems like "just a bunch of slobs stinging the consumer and putting each other's salaries up over a heavy lunch".

The writer is the General Secretary of the Trades Union Congress

React Now

Latest stories from i100
Have you tried new the Independent Digital Edition apps?
iJobs Job Widget
iJobs General

(Senior) IT Support Engineer - 1st-3rd Line Support

£40000 per annum: Ashdown Group: A successful IT service provider that has bee...

Wind Farm Civil Design Engineer

£55000 - £65000 Per Annum: The Green Recruitment Company: The Green Recruitmen...

Principal Marine Mechanical Engineer

£60000 - £70000 Per Annum: The Green Recruitment Company: The Green Recruitmen...

Principle Geotechnical Engineer

£55000 - £65000 Per Annum: The Green Recruitment Company: The Green Recruitmen...

Day In a Page

Read Next
A Russian hunter at the Medved bear-hunting lodge in Siberia  

Save the Tiger: Meet the hunters tasked with protecting Russia's rare Amur tiger

Oliver Poole
Save the Tiger: Meet the hunters tasked with protecting Russia's rare Amur tiger

Hunters protect Russia's rare Amur tiger

In an unusual move, wildlife charities have enlisted those who kill animals to help save them. Oliver Poole travels to Siberia to investigate
Transfers: How has your club fared in summer sales?

How has your club fared in summer sales?

Who have bagged the bargain buys and who have landed the giant turkeys
Warwick Davis: The British actor on Ricky Gervais, how the Harry Potter set became his office, and why he'd like to play a spy

'I'm a realist; I know how hard this business is'

Warwick Davis on Ricky Gervais, Harry Potter and his perfect role
The best swim shorts for men: Bag yourself the perfect pair and make a splash this summer

The best swim shorts for men

Bag yourself the perfect pair and make a splash this summer
Has Ukip’s Glastonbury branch really been possessed by the devil?

Has Ukip’s Glastonbury branch really been possessed by the devil?

Meet the couple blamed for bringing Lucifer into local politics
Dress the Gaza situation up all you like, but the truth hurts

Robert Fisk on Gaza conflict

Dress the situation up all you like, but the truth hurts
Save the tiger: Tiger, tiger burning less brightly as numbers plummet

Tiger, tiger burning less brightly

When William Blake wrote his famous poem there were probably more than 100,000 tigers in the wild. These days they probably number around 3,200
5 News's Andy Bell retraces his grandfather's steps on the First World War battlefields

In grandfather's footsteps

5 News's political editor Andy Bell only knows his grandfather from the compelling diary he kept during WWI. But when he returned to the killing fields where Edwin Vaughan suffered so much, his ancestor came to life
Lifestyle guru Martha Stewart reveals she has flying robot ... to take photos of her farm

Martha Stewart has flying robot

The lifestyle guru used the drone to get a bird's eye view her 153-acre farm in Bedford, New York
Former Labour minister Meg Hillier has demanded 'pootling lanes' for women cyclists

Do women cyclists need 'pootling lanes'?

Simon Usborne (who's more of a hurtler) explains why winning the space race is key to happy riding
A tale of two presidents: George W Bush downs his paintbrush to pen father’s life story

A tale of two presidents

George W Bush downs his paintbrush to pen father’s life story
Restaurateur Mitch Tonks has given the Great Western Pullman dining car a makeover

The dining car makes a comeback

Restaurateur Mitch Tonks has given the Great Western Pullman dining car a makeover
Gallery rage: How are institutions tackling the discomfort of overcrowding this summer?

Gallery rage

How are institutions tackling the discomfort of overcrowding this summer?
Louis van Gaal has £500,000 video surveillance system installed to monitor Manchester United players

Eye on the prize

Louis van Gaal has £500,000 video surveillance system installed to monitor Manchester United players
Women's rugby: Tamara Taylor adds fuel to the ire in quest to land World Cup

Women's rugby

Tamara Taylor adds fuel to the ire in quest to land World Cup