Cable welcomes report which slams excessive executive pay

VINCE CABLE has welcomed a report which claims that executive pay is so over-the-top at some British companies that it is "deeply corrosive" to the economy.

"When pay for senior executives is set behind closed doors, does not reflect company success and is fuelling massive inequality, it represents a deep malaise at the very top of our society," says Deborah Hargreaves, chair of the High Pay Commission which published the report.

The report was paid for by a left-wing think tank, Compass, but according to The Guardian the Business Secretary's blessing means some of the recommendations could be picked up by the Government early next year.
Among them are:

• Putting employees on remuneration committees;

•  Forcing companies to disclose the difference between the highest paid executive and the company median;

• Making companies reveal the total pay earned by executives;

• Establishing a new national body to monitor high pay.

The report gives specific examples of rocketing executive pay. In 1979, the senior executive at BP earned 16.5 times what the average employee earned. Today, he earns 63 times the average. At Barclays, top pay is now 75 times that of the average worker, while in 1979 the ratio was 14.5.

The report explodes the myth that high pay is necessary to prevent a talent drain. It observes that only one FTSE-100 chief executive was poached in five years - and this person went to another British company.

The Guardian says the Liberal Democrats are taking the High Pay Commission's report seriously. "Put it this way, this report is not going to be kicked into the long grass," said a party source.
 
Cable is reportedly keen to introduce legislation next year to curb excessive pay. "Many of the options we are consulting on are reflected in the High Pay Commission's final report," he said. A government consultation on the subject is due to end on Friday. ·