From the murmurings emerging from No. 10 this week, the UK government appears to be backtracking on PM May’s pre-coronation pledge to tackle grossly excessive executive pay.
Twenty years ago the average UK chief executive made 40 times as much as the average worker – now that ratio is 130 according to the High Pay Centre. In the case of BP, the company lost £3.5bn the year Bob Dudley picked up £14m in pay and bonus. Shareholders were completely unable to rein in his ridiculous remuneration package. This bonanza for the richest is happening at a time when wages for everyone else are stagnating, living standards are falling and too many people are struggling just to get by.
In particular, PM May should stick by her pledge to make it compulsory for actual workers to be on companies’ top boards, disrupting the cosy club that leads to pension funds being raided and poverty wages for those who actually generate profits for the business. It is unacceptable that she can say one thing before her assumption to power and then do a screeching U-turn a few months later.
Additionally, don’t believe the corporate spin that seeks to cast doubt on the efficacy of reasonable measures to restrain greed. According to the apologists for Dudley & co, publishing pay ratios will “throw out some odd results. Under this test, Goldman Sachs will look like a more equitable company than John Lewis thanks to the very high pay of the average banker… It’s also unclear what companies will do. Massively reduce the chief executive’s pay or massively increase the average worker’s pay? It’s worth being clear that although shareholders sometimes balk at chief executive pay, they would rather overpay one person than see profits redirected into the pockets of the rank and file.”
Firstly, the public are not daft. We can understand John Lewis’ excellent structure where the staff are shareholders and properly rewarded for their work. Secondly, if shareholders are not willing to look after the workers who are paying their dividends, then they deserve nothing back from the company. To be honest, whether they reduce CEO pay or increase poverty wages at the other end, either outcome would be welcome. If they decide to outsource jobs to distort these ratios, then that should be published and exposed as well.
Transparency is badly needed in our boardrooms. There must be no hiding places in society for individuals to amass ludicrous amounts of wealth by exploiting those who slave away to make their money. We MUST tackle the ridiculous inequality that is blighting our society where a lucky few sail around blissfully on super-yachts and millions barely even manage from month-to-month, relying on Food Banks and sinking deeper into debt. Our democracy depends on basic justice.