= TAKING ACTION ON SPIRALLING BONUSES
Spiralling pay at the top must be stopped!
Spiralling pay for executives is wasteful, unnecessary and unfair.
In May 2012 ShareAction launched the 'Your Say on Pay' campaign to tackle spiralling boardroom rewards. With the help of our supporters we've been mobilising the combined power of thousands of savers to tell companies to think again about excessive executive pay.
Ballooning boardroom pay is a problem. The independent High Pay Commission concluded in its final report that "excessive top pay is deeply damaging to the UK as a whole". Even the Government agrees, with Vince Cable, the Business Secretary, saying "In the last decade we have seen extreme increases in top executive pay which appear to be completely unrelated to the performance of companies. They are therefore acting against the interests of shareholders and consumers."
Here is how we've been influencing the situation:
Executive pay awards at companies listed on the stock market are put to a vote of shareholders. Most of these votes are controlled by big City investors acting on behalf of pension funds and ISA savers. This campaign has been pushing major shareholders to vote down excessive pay at the companies they invest in.
Along with many of our supporters, we've been sending big investors a clear message:
IT'S TIME TO VOTE DOWN EXCESSIVE PAY.
If you are a pension fund trustee or charity trustee, please go to our Investors page for briefing materials on what you can do.
If you want to take action as an ordinary member of a pension fund or as someone with ISA savings, use our ACTION TOOL here.
You can find out more on our FAQ page.
Why is high pay a problem?
One person earning more than another isn't the problem.
The problem is when pay at the top of a company escalates out of all proportion to pay for everyone else in the firm and to the financial returns to the company's shareholders.
In 2010, the average FTSE 100 executive earned 145 times the average worker.(1) In the past ten years, chief executives' pay has risen 9 times faster than that of the median earner. (2)
Sadly, spiralling executive pay doesn't always reflect better performance. Companies have been found to ‘move the goal posts' on bonus schemes - altering the thresholds used so that executives still receive giant pay-outs despite lack lustre performance. We saw this after the 2008/9 financial crisis when FTSE 100 companies lost almost a third of their value but pay awards to their executives still rose by an average of 10%.(3)
Unfair pay causes problems in British society. It contributes to the growing levels of inequality seen in the UK and to a widespread sense of unfairness. At a time of austerity, when millions in our economy are struggling financially, greed at the top destroys trust and good will. The High Pay Commission's chair, Deborah Hargreaves, has called it "deeply corrosive" to our economy.
This campaign gives you the chance to take action on this problem.
1) http://highpaycommission.co.uk/wp-content/uploads/2011/09/HPC-IR.pdf
2)Median means the middle value of a list of numbers, when those numbers are sorted by increasing value. http://www.tuc.org.uk/extras/unfairtomiddling.pdf
3) http://www.guardian.co.uk/business/2009/sep/14/executive-pay-keeps-rising
