A Wage Crisis?
The bosses of Britain's biggest companies will have made more money this year by 2pm today [Jan 5] than the average UK worker will earn in the entire year, according to analysis of pay gaps at a time of widespread strike action and a cost of living crisis.
The High Pay Centre, a think tank that campaigns for fairer pay for workers, says that by early this afternoon - the third working day of the year - a FTSE 100 chief executive will have been paid more than a UK worker's annual salary, based on median average remuneration figures for both groups.
FTSE 100 chief executives are paid £3.4m on average, which works out at 103 times the £33,000 average salary for full-time UK workers, according to Office for National Statistic figures.
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| For He Had Great Possessions Amy Julia Drucker (1873-1951) Photo Credit: Ben Uri Collection [CC BY -NC-ND] |
Luke Hildyard, the director of the High Pay Centre, said:
"In the worst economic circumstances that most people can remember, it is difficult to believe that a handful of top earners are still raking in such extraordinary amounts of money. The UK economy really cannot afford for such a big share of the wealth that is created by all workers to be captured by such a tiny number of people at the top,"
The highest paid FTSE 100 CEO, according to the research, was Sebastien de Montessus of Endeavour, which operates goldmines in Ivory Coast, Burkina Faso and Senegal. He was paid £16.9m, including an £8m "one-off award" when the firm relocated from Toronto to London. The second highest paid boss was Pascal Soriot of AstraZeneca, who was paid £13.9m...
(Rupert Neate, The Guardian, 2023)
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| The First madness of Ophelia Dante Gabriel Rossetti (1828-1882) Picture Credit: Gallery Oldham [CC BY-NC-ND] |
Civil service bosses are routinely collecting large "performance bonuses" on top of six figure salaries.
... The latest example is the head of a failing defence quango who received a £100,00 bonus last year. Sir Simon Bollom, chief executive of Defence Equipment and Support (DE&S) ... was already paid a salary of between £275,000 and £280,000. Adrian Baguley, his deputy (salary £150,000, approximately) was paid a bonus in the region of £50,000.
... The public accounts committee has rightly described procurement as broken and criticised the waste of public money as well as a departmental culture resistant to change. The latest bonuses do nothing to instill confidence that the MoD is learning lessons.
It is the same story of largesse at the tax office and the DVLA. Daljit Rehal, chief digital and information officer at HM Revenue & Customs (salary approximately £200,000) received a bonus in the region of £40,000 despite delays to its programme of digitising tax returns. Five senior DVLA staff received bonuses despite a recent investigation by this newspaper documenting the huge delays and poor service for people trying to get a driving licence.
Something has gone very badly wrong with the ethos of public service ... It is hard to justify big pay packets and ballooning bonuses as the price of attracting top talent when so many departments are failing.
Bonuses, if they are to be paid at all, should be confined to cases of genuine excellence. Otherwise, especially at a time of falling living standards and tight public spending, these bumper payouts are an insult to those whose taxes pay for them. We cannot afford to bankroll failure.
(Jawad Iqbal, The Times, 2022)
The whole culture of large bonuses and salaries is, to me, misguided. Do your job to the best of your ability, take home a fair wage or salary and be satisfied with that. If you are earning £275,000 a year surely that is enough?
Apparently not. Look at the ridiculous salaries and bonuses these water bosses are on.
*The boss of a water company with one of the worst pollution records in England has been handed more than £1m in pay and bonuses. Anglian Water's chief executive, Peter Simpson, landed a "substantial" £337,651 bonus as part of a £1.3m pay package.
The reward comes despite English water companies overseeing such shocking levels of pollution that the Environmental Agency has said bosses should be jailed for serious offences.
Anglian Water recorded nearly a quarter of all serious pollution incidents last year, according to the agency.
... Simpson's base salary rose to £531,365 in 2021-22, up from £505,277 a year earlier.
... The utility company Thames Water is also facing heat for handing its chief executive, Sarah Bentley, £727,000 worth of bonuses despite its poor performance on pollution. The bulk of Bentley's bonus will be distributed as part of a £3.1m "golden handshake" sign-on payment.
... Andrew Speke of the High Pay Centre thinktank said: "When the Environment Agency is calling for water company bosses to be jailed over their record on pollution, boards of the worst offending companies should be taking serious action ... It's time for the government to intervene."
(Alex Lawson, The Guardian, 2022)
Government to intervene? There's no chance of that. Meanwhile overseas workers at P&O ferries are being paid less than £4 an hour whilst the chief executive, Peter Hebblethwaite earns £325,000 plus bonuses. It was he who deliberately broke employment law by sacking 800 staff not so long ago. Again, Ramfoam Ltd won a £149 million contract in May 2020 to supply plastic visors to hospitals. The company was left with pre-tax profits of £69.2 million in 2022. Owners Philip Johnson, Paul Woolridge and Tim Mulqueen between them pocketed £23 million in dividends plus payments to directors (these three and two others) for the period coming to £4.9 million.
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| Work, Ford Madox Brown (1821-1893) Photo Credit: Manchester Art Gallery [CC BY-NC-ND] |
Big firms should share their profits with staff and give them a say in how chief executives are paid, or risk a breakdown of trust in the capitalist system, MPs said yesterday.
Wage Madness
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| Raving Madness Caius Gabriel Cibber (1630-1700) Photo Credit: Bethlehem Museum of the Mind [CC BY-NC] |
The billionaire hedge fund manager Sir Chris Hohn paid himself £343m last year after his Children's Investment (TCI) fund recorded a 66% jump in pre-tax profits to $695m
It is believed to be the highest annual amount ever paid to one person in Britain and equates to £940,000 a day. It is 9,000 times the average UK salary and 1,700 times the amount paid to the prime minister, Boris Johnson...
Hohn is one of the UK's more generous philanthropists and gave away $386m through his personal charity, the Children's Investment Fund Foundation in 2019, according to the latest available accounts, and is the biggest single donor to Extinction Rebellion.
The High Pay Centre's Luke Hildyard, who campaigns against excessive executive pay, said: "Extreme payouts such as this demonstrate that there is scope for highly profitable companies to pay their staff more, and for the super-rich that either own or invest in hedge-funds to pay more tax, so that everyone can enjoy better public services and a fairer society.
(Rupert Neate, The Guardian, 2021)
How can one person be worth £940,000 a day? This man contributes hugely to the public good by his generous contributions to charity but it is beyond belief that he earns 1,700 times the amount paid to the prime minister.
CEO Pay
Unions have described firms that pay their chief executives huge multiples compared with the wages of average workers as obscene and have called on ministers and shareholders to end the "runaway train" of inequality.
A report by the High Pay Centre thinktank yesterday revealed that...Ocado's CEO, Tim Steiner, was paid £58.7m last year - that is 2,605 times the £22,500 paid to the firm's staff on average. It means Steiner was paid as much as the average Ocado worker's annual salary over one day of working.
In second place was JD Sports, which paid its chief executive, Peter Cowgill, £5.6m, but paid staff an average of £18,300. Cowgill's pay was 310 times the median average.
Tesco took third place for paying the CEO 305 times the median pay.
Lawrence Turner, head of research at the GMB union said:
"This shocking and important report provides a vivid snapshot of the staggering inequalities and exploitation... There is no business or moral justification for paying an executive an obscene ratio of more than 2,000 times the average worker. Action is needed, especially at a time when hundreds of thousands of jobs are under threat and households are struggling to make ends meet. Ministers, employers and shareholders must put an end to this runaway train."
The report showed that across the UK's 100 biggest stock market listed companies CEOs collected 73 times that paid to workers on average.
The High Pay Centre showed that the biggest pay gaps were in retail, where on average bosses were paid 140 times that of staff. The smallest gap was in financial services, with a ratio of 35:1.
(Rupert Neate, The Guardian, 2020)
*Finance and insurance workers have enjoyed pay rises of up to 20 per cent while wages have flatlined for the lowest earners, according to a study. The Centre for Economic and Business Research said that the lowest 10 per cent of earners recorded pay growth of only 1.3 per cent amid the cost of living crisis. The researchers added that additional support needed to be targeted at the poorest households to avoid worsening hardship.
(The Times, 2022)
*Soaring profits at two of Britain's biggest energy companies have been described as an "insult" to millions of people struggling with the cost of living crisis, with high oil and gas prices funding multibillion-pound rewards for their shareholders...
Shell posted record earnings of $11.4bn (nearly £10bn) for the period from April to June and promise payouts worth £6.5bn...
At the same time, Centrica, the owner of British Gas, reinstated its dividend, handing investors £59m, after reporting operating profits of £1.3bn during the first half of 2022...
(Rob Davies, The Guardian, 2022)
*Bumper profits of nearly £50bn shared by the world's five biggest oil companies prompted a chorus of calls for higher taxes on the sector as UK households were told to brace for average annual energy bills of more than £3,600 this winter...
In an indication of the political sensitivity of the cost of living squeeze, the BP chief executive, Bernard Looney, agreed that he and chief financial officer, Murray Auchincloss, would donate their £400 discount to charity. Looney, whose total pay in 2021 reached £4.5m, in February described BP as a "cash machine", even before Russia's invasion of Ukraine raised prices further. The company's profit between April and June was the second highest in BP's history, and rounded off a period that will be remembered as one of the most profitable quarters in the history of the oil industry.
(Jasper Jolly, Mark Sweney, The Guardian, 2022)
Unbelievable. Looney had a salary of £4.5 million in 2021 and he is donating the £400 energy rebate he is receiving from the government to charity. How does he even qualify for a rebate in the first place? Surely it can't be too difficult to ensure that anyone earning over a certain amount of money, let's say £150,000, doesn't get that payment?
*The UN secretary general, Antonio Guterres, has described the record profits of oil and gas companies as immoral and urged governments to introduce a windfall tax, using the money to help those in need...
"It is immoral for oil and gas companies to be making record profits from this energy crisis on the backs of the poorest people and communities, at a massive cost to the climate... I urge all governments to tax these excessive profits, and use the funds to support the most vulnerable people through these difficult times... Household budgets everywhere are feeling the pinch from high food, transport and energy prices, fuelled by climate breakdown and war. This threatens a starvation crisis for the poorest households, and severe cutbacks for those on average incomes."...
(Matthew Taylor, The Guardian, 2022)
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