Public Wants Top Bosses' Pay Reduced

28th January 2012, 19:32

Boardrooms should "wake up" to the gap between sky high executive pay and public opinion, according to a new report.

A survey conducted for the independent monitoring body the High Pay Centre found most people in Britain would like to see executive pay reduced, with many believing top bosses pay is unfair and unjustified.

Only 7% of those questioned thought the chief executive of a FTSE 100 company should earn more than £1m a year, including bonuses and pension contributions.

Just 1% believed Britain's bosses were worth the £4m plus which is now the average for the heads of FTSE 100 companies.

The High Pay Centre's director Deborah Hargreaves said: "Top executive pay and the behaviour of business are issues at the heart of the current public debate about how we rebuild our economy.

"Our polling shows the public do not believe executives, even of the biggest companies, should be awarded multi-million pound pay packages. It is time for boardrooms to wake up to what is fair and act now to rebuild public trust."

The ICM survey comes as the row rumbles on over Royal Bank of Scotland chief executive Stephen Hester's share bonus for 2011, which is worth almost £1m.

Sir Philip Hampton, the chairman of the bank which is 83% owned by the taxpayer, has said he will waive his £1.4m bonus.

But Mr Hester has not said he will reject his and now Sky's City editor Mark Kleinman has discovered he could receive up to 12 million shares as a bonus for his work in 2012.

Prime Minister David Cameron has sidestepped calls to block his current handout and said it was up to Mr Hester whether he chose to reject it or not.

The High Pay Centre said two-thirds of those surveyed would like to see ordinary workers included on the remuneration committees that set bosses pay.

Around 70% of respondents also supported giving shareholders "binding powers" to block pay packages for senior executives.

Ms Hargreaves said: "The public are squarely behind the case for reform. People want to see rewards based on fairness.

"Runaway executive pay has undermined the public's trust in business and we believe Parliament and the business community should take stronger action to curb it."

However, some at the top of British business believe high pay - while unpopular - is vital to attract and retain top talent.

"As long as it's pay for performance, I think it's the right thing," Sir Martin Sorrell, chief executive of marketing communications firm WPP, told Sky News.

"If I look at our competitors, they are paid even more competitively than myself or indeed some of my colleagues so I think I would disagree with this survey."

In December, the High Pay Commission published a 12-point plan to tackle pay inequality.

Earlier this month, Business Secretary Vince Cable unveiled plans to curb executive pay including forcing firms to justify high salaries.

Labour have criticised the plan, saying it does not go far enough.

(c) Sky News 2012