Channel 4 investigative documentary series Dispatches is to look into the pay-packet of big business bosses. In the last four years the pay of the 100 top FTSE bosses rose by 21%, whilst average wages went up by just 2.8%, reveals independent research commissioned by the broadcaster.
Moreover, the chiefs of British business are now taking home average pay of 4.8 million pounds a year, that’s nearly 200 times the average working wage in the UK.
The programme also found that at least 4 senior ministers have sat on CEO remuneration committees, responsible for deciding high levels of corporate pay in the past, some just before taking up their government roles. This includes the newly appointed Business Minister, Michael Fallon.
The programme, which airs tonight on Channel 4 follows Sir Michael Darrington – former CEO of high street chain Greggs – and his ambitious campaign aimed at cutting executive pay by half, capping bonuses and giving more power to shareholders.
Will Hutton, economist and former Chief Executive of The Work Foundation is critical of the ‘greedfest’ culture at the top of some British businesses.
“It is actually a greed fest…really what’s taking place here is a kind of arms race like the one between America and the Soviet Union over nuclear weapons. You know because one person has got an amount, the company that’s next feels it has to pay its man or woman that much more to hold them, there’s absolutely no constraint”.
Dispatches research has found that some politicians have been responsible for deciding high levels of corporate pay in the past.
In his six years at United American Tobacco, Ken Clarke approved pay totalling £13 million. Michael Fallon MP, the newly appointed business minister sat on a committee that awarded over £22 million to one CEO at a brokerage firm in the last 6 years.
This, considering he is said to now be helping Business Secretary Vince Cable steer reforms through parliament on bringing about greater pay discipline. When questioned in the programme about whether politicians should sit on remuneration committees Cable said:
“I think probably not. Particularly when we’re serving in government. We went through a phase 20, 30 years ago where government ministers were intervening and trying to set the pay of people in private sector companies. It was a) impossible because of the complexity and b) it became very political and businesses were undermined.”
In response to Michael Fallon’s previous position on a remuneration committee Cable said:
“He’s a very good guy and I’m very glad we’ve got him in the department but he will be helping me to get this legislation through parliament that will bring much more pay discipline to bear.”
The Department of Business said in a statement on behalf of Michael Fallon: “The Minister fully supports the Government’s proposals on executive pay”
Both Michael Fallon and Ken Clarke stood down from their remuneration committee roles before they entered government.
Secrets of your Bosses Pay – Channel 4 Dispatches, tonight at 8pm