More than three quarters of organisations are seeing reduced output, profitability or...read more
With people protesting about below inflation pay rises, executive pay seems to be rising in some quarters and reports suggest the Government is looking to increase boardroom remuneration.
As the rail strike began on Tuesday, news emerged that Steve Barclay, the Prime Minister’s chief of staff, has written to Chancellor Rishi Sunak with a plan for “deregulatory measures to reduce the overall burden on business” and attract more firms to the UK. The plan calls for the removal of restrictions on director – and specifically non-executive director (NED) – remuneration. The letter calls for Business Secretary Kwasi Kwarteng to outline “deregulatory measures to reduce the overall burden on business” going on to refer explicitly to the need to change curbs on bosses’ pay. Changes reportedly being considered by the Department for Business, Energy and Industrial Strategy include amending the UK corporate governance code to allow NEDs to own more shares in the company.
With talk of a summer of strikes by a range of public sector workers who have had below inflation pay rises or none at all for years, it seems a little insensitive to be talking about more pay for senior bosses and NEDs. Yet that is apparently where we are. A recent High Pay Centre report showed that cuts to executive pay during the pandemic led to a fall in the median CEO/median employee pay ratio across the FTSE 350, but that more recent disclosures indicate that pay gaps will widen again in 2022. The TUC has reported that ‘bumper’ bonuses are on the way back in financial services and are rising more than six times faster than average wages in the UK. All of this exacerbates inequality, including the gender pay gap because women tend to be more congregated on the lower rungs of the pay ladder.
Why is it that reducing curbs on executive pay is being considered at a time when everyone else is being asked to take an effective cut to their pay, in many cases meaning they will struggle to feed their families? With stories of nurses being forced to go to food banks and single parents being particularly affected, it seems as if our values are all askew. The very people we clapped during the pandemic – the public sector, dominated by women – are now expected to take the biggest hit. Yet many of the most wealthy did fairly well out of the crisis and find themselves with extra cash because they weren’t able to spend it on travel and going out. Many of these are also seeing their shares rise. It seems that to those with more more is given. Anyone lower down the pecking scale, who Oliver Twist-like, asks for more, is lambasted by the press as selfish or uncaring and worker is pitched against worker, citizen against asylum seeker, pensioner against worker.
Historical parallels are really overworked in the news, but it feels sometimes like we are heading straight back to the times of Charles Dickens – or before – rather than to the 1970s. Surely if we are all to be in this together everyone has to take a hit and those who can afford to take more of a hit should do so to protect the most vulnerable. It may bring more ‘talent’ to the UK to offer bigger executive salaries, but is an even more unequal society with a public sector on its knees any kind of viable vision for the future? Anyone who has dealt with any aspect of the public sector in recent weeks or months – and before – knows it is struggling. The social care sector can’t get workers because the pay is too low; the same goes for childcare; the schools are strung out coping with an unending wave of crises; the criminal justice system is barely functioning at all. The reasons are clear – low pay, low morale, not enough people [due to low pay and low morale generally] and underfunding.
People understand that there has been a crisis and that money is tight. What they don’t understand is that it is generally those least able to pay who are being asked to pay the price.