Public faith in the system ‘collapsing’

Public anger is at boiling point over sky-high fat cat pay packets, an influential group of investors has warned.

People’s patience is wearing perilously thin with bosses awarding themselves millions of pounds in wages each year, pension fund advisor Pirc said this week.

In the run up to a number of annual general meetings where pay packets will be ratified, Pirc said it is time to “bring some sanity back into the system” and called on shareholders to reject obscene pay deals offered to executives at a number of firms.

Warning that shareholders must share responsibly for a culture of runaway corporate greed, Pirc said, “Executive pay is like a corporate equivalent of the MPs’ expenses scandal, mixed with Groundhog Day.

“The same gap between public expectations and corporate practice is exposed year after year, but with no resolution.

“It is no wonder that the public has lost faith in the system.”

Among the firms singled out by Pirc for excessive pay awards were Barclays bank and construction firms Persimmon and Taylor Wimpey.

Former Persimmon chief executive Jeff Fairburn earned £85m in pay and bonuses during 2017 and 2018, while Taylor Wimpey’s Pete Redfurn earns £3.2m annually – 44 times more than the average worker earns per year at the building firm.

Meanwhile, Pirc said Barclay’s chief executive Jes Staley’s £3.4m wage – which is 34 times higher than the average pay packet – is also too high.

Unite assistant general secretary Steve Turner said that while shareholder revolts against executive greed are welcome, “it’s not enough to rely on investors to ensure fairness and curb blatant excesses”.

“It’s clear to anyone by now that they, as well as those in Britain’s boardrooms, have repeatedly failed to make any meaningful difference,” Turner said.

“There needs to be real action to rein in the eye-watering executive pay and ever widening pay inequality that is causing ordinary people’s faith in the system to collapse and that action can only come from government.

“A good start would be to legislate for the inclusion of worker representatives on boards, as well as a clamp down on exploitative work practises – such as bogus self-employment and zero-hour contracts – as well as the strengthening of trade union rights to organise and bargain for better wages on behalf of workers.”