Boardroom pay gap widens

06-11-2006

Boardroom pay gap widens
The gap between company directors' salaries and that of shop-floor workers has again increased over the past year, a new report has revealed.

Incomes Data Services (IDS) eighth annual directors' pay report says that the average salary of a chief executive at a FTSE 100 listed company is 98 times higher than that of the average worker in full-time employment in Britain.

Six years ago the imbalance stood at 39 times, with directors' pay increasing by 102 per cent during the same period.

In comparison, the average full-time employee's salary has gone up by 29 per cent.

IDS' survey of the boardroom pay packets of the FTSE 350 companies says that the average chief executive made £2,866,234 in the year ending June, including bonuses; while the lowliest director takes home at least £624,341.

In addition, the average annual bonus for chief executives was revealed to be 130 per cent of their basic salary.

Steve Tatton, editor of the IDS review, said: "Oscar Wilde may not have had directors' pay in mind when he said 'moderation is a fatal thing ... nothing succeeds like excess', but given our latest survey it seems like remuneration committees have acted on his advice."

Commenting on today's results, Brendan Barber, general secretary of the Trades Union Congress (TUC), said: "It is hard not to conclude that this further huge rise in executive pay is more about greed than performance. No one should now have any illusions that executive remuneration has been brought under control. Giving shareholders a vote on boardroom pay has failed to rein in excess, as remuneration committees have simply found new ways to keep pushing up pay."

He went on to add: "The stratospheric levels of directors' pay compared to average wages mean that executives now live in a class apart, even from employees in their own companies. It is not just socially divisive, but bad for the economy."


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