Directors’ pay increases by 49% as unemployment hits 17-year high of 2.75 million
Unions have reacted angrily to news that company directors have awarded themselves a 49% pay rise in the last year, to an average of £2.7m, as unemployment stands at a 17-year high of 2.57m.
Figures released today by Income Data Services also show the average pay for a chief executive rose by 43.5% to £3.5m and that directors’ pay is 113 times more than the average salary of a private sector worker, whose pay rose just 3% in the last twelve months.
Unite has called on the government to give shareholders stronger legal powers to curb excessive boardroom pay, the TUC said the pay bore no resemblance to reality and the GMB called directors “elite greedy pigs”.
Unite general secretary Len McCluskey said: ‘This damning report shows just how much these pampered directors are removed from the lives of working people struggling to hold onto their jobs and paying soaring energy, food and transport costs. “This is an astonishing display of boardroom greed.
“It is exactly why people have been occupying St Paul’s to protest against the behaviour of the City elite and a government which is turning a blind eye to these abuses. Institutional shareholders need to exercise much greater scrutiny and control of directors’ pay and bonuses.
“The government should be strongly considering giving shareholders greater legal powers to question and curb these excessive remuneration packages. Directors of top companies should not be getting these outrageous packages, especially those heading up companies that are failing to perform. It’s obscene and shows that the City has learnt nothing during the financial troubles of the last four years.”
TUC general secretary Brendan Barber said: “With the FTSE 100 down on last year and most staff getting pay rises of less than two per cent, these bumper settlements prove that CEO pay bears no resemblance to performance or economic reality.
“Top directors have used tough business conditions to impose real wage cuts, which have hit people’s living standards and the wider economy, but have shown no such restraint with their own pay. Boardroom pay rewards are a brazen stitch-up. Reform should start with employee representation on remuneration committees, which would give directors a much-needed sense of reality.”
GMB general secretary Paul Kenny said: “This is another shining example of how the elite greedy pigs who run our top companies behave. This is in stark contrast with what has happened to average earnings for workers in 294 occupations that cover 90% of the UK workforce that have seen drops in living standards of up to 20%.
“The fall in living standards for the majority means that Government’s strategy for an economic recovery is in tatters as two thirds of the economy is consumer driven and Osborne must be the only person who does not get it “George Osborne has the economic literacy of a stick of rhubarb. These figures for top peoples pay show that his cronies who backed his deflation are completely out of control.
“Apart from these FTSE directors and CEO’s everyone from plasterers to IT specialists, from travel agents to midwives, from hairdressers to police inspectors have seen the value of their earning drop when they have a job. It has got a lot worse in the past year as the recovery underway at the time of the election stalled.
“Squeezing wages, pay freezes and cutting jobs will not restart the economy. Using the IMF measures his cuts will reduce real private consumption by 4% and GDP by 3.4% over the next few years.”
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