The pay gap between directors and their staff continues to grow.
A study by the TUC reveals that basic pay rises for directors in the 456
companies surveyed outstripped those for average employees by three to one.
The research follows the end of the DTI consultation period on its
regulations for directors’ pay, which could require firms to introduce an
annual shareholder vote on the level of remuneration for senior executives.
The survey claims that average annual salary and bonuses for the highest
paid directors jumped from £201,000 in 1994 to £416,073 in 2001 – an increase
of 107 per cent. But the average pay for employees at the same companies rose
by only 31 per cent over the same period.
In the TUC poll, 73 per cent of people believe directors should get pay
rises at a similar rate as the rest of the company’s staff. Only 23 per cent
think companies have to pay the going rate for directors – even if this means
rises greater than other staff.
TUC general secretary John Monks said the Government must act to close the
gap. "We welcome government proposals for shareholder votes on directors’
pay, but want to see more disclosure to encourage," he said.
The TUC wants companies to make information on pay more transparent, so
remuneration committees take this into account when setting directors’ pay.