High executive pay in Britain slammed by independent report

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Top British executives are receiving "stratospheric" pay rises despite workplace "failure," an independent report into boardroom salaries said Tuesday, and called for an overhaul of remuneration.

Following a year-long study, the High Pay Commission said salaries of some top executives in Britain had soared by more than 4,000 percent over the past 30 years.

By contrast, the average wage in Britain currently stands at £25,900 (29,933 euros, $40,402), up about 300 percent since 1980, it added.

"Stratospheric increases in pay are damaging the UK economy -- distorting markets, draining talent from key sectors and rewarding failure," the High Pay Commission said in its report.

"There appears to be little truth in the myth that pay must escalate to halt a talent drain in executives. The growing pay gap between the top 0.1 percent and everyone else is increasing public disillusionment, damaging trust and fuelling the view that business leaders are in it for themselves," it added.

The Commission urged various reforms, including a national body to monitor high pay and placing employees on remuneration committees.

The average annual salary of bosses heading London's 100 biggest listed companies stood at £4.2 million in 2010.

The head of Barclays bank meanwhile earned 75 times the company's average salary, compared with 14.5 times in 1979.

At energy giant BP, its head last year earned 63 times the company's average salary, compared with a multiple of 16.5 three decades ago. At mining group Lonmin it soared to 113 times the average, compared with 44 times in 1979.

The report, entitled 'Cheques with Balances: Why tackling high pay is in the national interest', showed that decisions to award huge pay packages were set by a "closed shop".

"There's a crisis at the top of British business and it is deeply corrosive to our economy," said High Pay Commission chairman Deborah Hargreaves.

She added: "When pay for senior executives is set behind closed doors, does not reflect company success and is fuelling massive inequality, it represents a deep malaise at the very top of our society."

A spokesman for Prime Minister David Cameron welcomed the findings.

"If you look at the High Pay Commission report, a lot of what they are saying is in line with what was in the consultation (on pay) that we have put out," the spokesman said.

© 2011 AFP

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