The report of the High Pay Commission (HPC) was released yesterday - click here. In previous posts, I have lamented about high pay – see here and here.
The HPC’s report finds evidence that
“Excessive high pay damages companies, is bad for our economy and has negative impacts on society as a whole. At its worst, excessive high pay bears little relation to company success and is rewarding failure.....Our findings also show that the argument used by many senior figures in British business, that pay must escalate in order to attract the best talent from abroad to UK companies, is a myth. Our own evidence shows that global mobility is limited, with only one successful FTSE 100 chief executive officer poached in five years – and even this person was poached by a British company.”
The scale of the relative rise in high pay uncovered by the HPC is staggering.
“Previously unpublished figures show that pay at the top has spiralled alarmingly to stratospheric levels in some of our biggest companies. In BP, in 2011 the lead executive earned 63 times the amount of the average employee. In 1979 the multiple was 16.5. In Barclays, top pay is now 75 times that of the average worker. In 1979 it was 14.5. Over that period, the lead executive’s pay in Barclays has risen by 4,899.4% – from £87,323 to a staggering £4,365,636......During the last 30 years rewards have been flooding upwards, with far more modest returns going to the average employee. Since the mid 1970s, the general workforce’s share of GDP had shrunk by over 12% up to 2008.”
The HPC report will not change anything as it is our political system which is broken. High pay is just one symptom of a deeper problem. I'll come back to this in future posts.