EXECUTIVE SALARIES

The chief executives of Britain’s leading companies are paid up to 478 times that of their workers, according to research that will rekindle the debate over directors’ pay. The study came as it emerged that the salary of Sir John Bond, the chairman of HSBC, is to rise 70% this year to £3.6 million. In contrast, 10% of workers at the bank, which reported a 37% surge in profits, will receive no rise and 40% will receive an increase below the rate of inflation.

Amicus, the union, is preparing to ballot 20,000 HSBC staff on industrial action unless the dispute over the discrepancy is resolved. The research shows that poor share-price performance is no barrier to big pay packets. Alain Dupuis, the highest-paid director at Compass, receives remuneration that is more than 100 times that of the catering group’s average employee. Yet in the year to January, Compass’s shares fell 35%.

At Rentokil Initial, despite a 22% dip in the value of shares last year, the average director was paid more than 21 times that of the average worker. The gap in pay is most pronounced at Carnival, the cruise group, where Robert Dickinson, president and chief executive, is paid nearly 500 times more than the average employee. Sir Terry Leahy, chief executive of Tesco, is paid more than 200 times the average employee.

Janet Williamson, TUC policy officer, said, “Where a company is doing badly it is particularly insulting if the chief executive is being paid an extreme multiple of ordinary staff pay. It seems a ‘one rule for us, one rule for them’ attitude has crept in and it is getting substantially worse.”

Trevor Merriden, editor of Human Resources, which conducted the survey, said, “Executive costs become far more meaningful when judged relative to those of staff. The connection between vast reward and great performance is not what it should be.” A Tesco spokesman said the survey was “misleading” because items such as performance bonuses were included. (Source: Times Online)