The report has found that senior pay levels are damaging the economy and society as a whole as remuneration packages are often concealed within complex reward arrangements.
Between 1979–1980 the director’s pay at Barclays stood at Ã‚Â£87,323, a multiple of 14.5 above average. The total earnings of the lead executive for 2009–2011 were Ã‚Â£4,365,636 – 75 times more than the average salary. This is just one example illustrating how levels of rewards have dramatically increased in the past three decades.
The High Pay Commission’s report stated: “When executive rewards seem to go beyond what is linked to that executive’s contribution to the success or welfare of the company, it damages public trust and contributes to an attitude that business leaders are ‘in it for themselves’.”
Several recommendations have been put forward to resolve some of the growing tensions surrounding this issue. They include proposals that arrangements are simplified by having a single base salary, remuneration committees should then decide on an additional award
There have also been calls for greater transparency and a standardisation of remuneration reports which would include a methodology to make it clear how a reward package had been calculated.
Deborah Hargreaves, Chair of the High Pay Commission, commented: “All three political parties have recognised the need to tackle top pay. Ministers and politicians have spouted much
rhetoric about fairness. We are calling on them to take this agenda forward. We must now halt
the trend towards greater inequality before we end up back at the levels of disparity evident in Victorian England.”