Comment boards vent fury on FTSE 100′s 49 per cent average pay rise and ask what are shareholders doing?
- 28 October 2011
The paper writes that "As households suffer the biggest squeeze on incomes since the 1920s, a study showed executives can now expect to earn £2.7million on average.
That is 113 times the national average of £24,000 for a worker in the private sector, where salaries have risen just 3 per cent in the last year.
The Mail also quotes Former Liberal Democrat Treasury spokesman Lord Oakeshott saying: ‘These greedy bosses sit on each others' remuneration committees and wave through each others' offensive pay rises."
The figures were produced by the Centre for Economics and Business Research. But these concerns will only be aggravated by another survey which shows that neither private nor public sector pay are keeping pace with inflation in the last three months as the Guardian reports here.
Research by Incomes Data Services shows median pay in the private sector rising 2.6%, while the median in the public sector was zero in the three months to the end of September.
The paper quotes Ken Mulkearn, editor of IDS Pay Report, said: "While pay awards are ahead in the private sector, they are still some way behind inflation, even in manufacturing, where pay awards are higher in comparison to other sectors."
Discussing the near 50 per cent average pay rise on the Guardian, nhsworker says: "Their shareholders should hold them to account. History shows that if you keep taking money off people, eventually the systems breaks down because the poor have nothing left to spend. Then the populace simply take back what was theirs by force and whole system resets. Increased inequality = increased crime + unhappiness + worse economy + worse health + worse for everyone."
On the Daily Mail comment boards, Jonboy from Bath wants shareholder action.
"Perhaps the shareholders should clamp down on this sort of thing. Trouble is, the big shareholders are institutional investors whose own directors have the same perks."
And on the Guardian kvlx387 echoes these points.
"The problem is as follows:
1. FTSE 100 companies are all owned by shareholders (otherwise they wouldn't be in the FTSE 100)
2. Shareholders (typically those with pension schemes) own companies though pension funds
3. Pension funds fail to exercise control over the companies they own (in fact, given the merry-go-round that are the boardrooms of UK's leading companies, it's more like I-scratch-your-back-you-scratch-mine)
4. Boardroom pay goes up out of control.
The solution is for the govenment to pass legislation that makes it a legal requirement for fund managers and financial institutions to pass voting rights to fundholders, so the ultimate owners of these companies (you and I) make decisions on directors' remuneration."
On the Telegraph avowedly non-socialists are upset as well.
realist43 writes: "It just staggers me that they have no sense of conscience. Just goes to show what their business ethics must be like. I'm not a Socialist, far from it, but you can see why on paper it sometimes seems like a good idea when you read headlines like this."
Markmason says: "I don't mind people making money but not when it is at the expense of others….or if you have a good product and sell shed loads then fine. What I do object too is the utilities and banks that run cartels. We are hit with 30% rises in gas for example and cannot really do anything about it because all of the companies have similar prices so there is no choice.add electricity,water,insurance etc. This is legalised robbery. Sitting at home and being afraid to put the heating on will be the ONLY choice that many have this winter.do we really want the people of the UK,supposedly a 1st world state,to live this way in the 21st century?"
More from Mindful Money:
To receive our free email newsletter sign up here.
- What has happened to food and energy prices and inflation in 2014?
- Both the Bank of England and the UK Public Finances are having a Mad Hatters Tea Party
- Invesco Perpetual's Mark Barnett on where UK equities go from here
- Mindful Money's weekly share-tips: Sports Direct, Reed Elsevier, Unilever, William Hill and WPP
- AstraZeneca gets a Pfizer boost
- The unanswered question - could new mortgage lending rules restrain house prices - outside London at least?
- Gap between investor income expectations and actual returns widens
- Consumer group Fairer Finance calls on banks and insurers to spare their customers the small print
- Despite greater pension freedom retirees are set to see their income collapse
- Lower earners and self employed may fail to get mortgages as big lenders' computerised decisions apply tougher lending rules