Clegg promises crackdown on 'abhorrent' corporate pay and pledges shareholders will have say on fatcat salaries
Shareholders and employees will get greater powers to block excessive boardroom pay as the Government ‘gets tough’ on fat cats.
Yesterday Nick Clegg said ministers were prepared to bring in legislation to curb ‘excessive and irresponsible’ salaries that bear no relation to performance.
Recent figures showed that executive pay at the biggest firms rose 50 per cent in the last year, taking the average deal for a FTSE 100 director to just under £2.7million.
Promise: Nick Clegg talks to Andrew Marr on his show, where he sministers were prepared to bring in legislation to curb 'excessive and irresponsible' salaries
The Deputy Prime Minister said the findings were a ‘slap in the face’ to ordinary hard-working families, who are being forced to endure pay freezes while living costs soar.
He said the Coalition wants to ‘break open’ the closed shop of remuneration committees, which see highly-paid non-executive directors approve massive pay hikes for their boardroom colleagues.
Mr Clegg confirmed that the Government was looking to put employees on such committees as well as giving shareholders more say over pay levels.
It is also looking at changes to increase transparency. One proposal is to force firms to publish the ratio between the pay of executives and the average pay of reg- ular employees.
Mr Clegg insisted that the Government would not set pay rates itself, and said he supported top executives being well-rewarded if their companies were successful.
But he added: ‘I think we need to call time on excessive and irresponsible behaviour. Just as we have been quite tough on unsustainable and unaffordable things in the public sector, we need to get tough on irresponsible behaviour of top remuneration of executives in the private sector.
Crackdown: Nick Clegg does not want state employees to feel like they are doing 'all the heavy lifting'
‘What I abhor is people getting paid bucketloads of cash, in difficult times, for failure.’
Appearing on BBC1’s Andrew Marr Show, he stressed: ‘These are tough times for everybody, whether in the private or the public sector, whether you’re a nurse or a factory worker, whether you are a taxi driver or whether you’re a civil servant.
‘And I think we need to make sure that people in the public sector don’t feel that they are doing all the heavy lifting . . . that people who are in a sense living by a completely different rule in the private sector are also held to account.’ He argued that shareholders should be given a ‘proper say’, adding: ‘They own the companies, after all.’
The Deputy Prime Minister said the Government backed most of the suggestions put forward by the High Pay Commission, which has called for greater action to tackle a widening pay gap.
The commission found that packages given to executives have increased by up to 5,000 per cent over the last 30 years – but the average worker’s salary has been left far behind, rising by about 300 per cent to £25,900 a year.
Chuka Umunna, Labour’s business spokesman, said: ‘Actions speak louder than words and, after more than 18 months in office, we have seen little movement on this issue from the Deputy Prime Minister and his Conservative coalition partners.’
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