How to end excessive pay
Excessive pay has been a growing source of public anger in recent years. Despite being snobbishly dismissed as populist prejudices, public perceptions of executive pay practices are largely accurate.
Top pay growth over the past couple of decades has greatly outpaced the meagre pay rises experienced by the wider workforce – and has not been matched by an obvious improvement in company leadership.
This is important for a number of reasons. Firstly, it has a terrible effect on the reputation of business. Secondly, very high executive pay both reflects and drives societal inequality. Finally, very high pay is a potential ‘canary in the coalmine'. If the boards of big companies have allowed such disproportionate pay increases to accumulate unchallenged, without any corresponding increase in executive performance, this surely raises question about the governance, values and accountability to stakeholders of the UK’s leading companies.