Consign fat cat pay to history TIME TO END FAT CAT PAY

Mail campaign urges big business to end boardroom excess as virus wreaks havoc

COMPANIES cutting dividends and laying off workers in a battle to survive the coronavirus crisis should not be handing millions of pounds to bosses.

That is the verdict of City figures, campaigners and politicians as the pandemic threatens the health and livelihoods of millions of families across the country.

And in a bid to convince big business to consign corporate greed to the dustbin and win back the trust of the public, the Mail today calls for an end to fat cat pay for good.

That is not to say rewards for success should be scrapped – but that now, more than ever, rewards for failure and boardroom excess cannot be tolerated.

The Bank of England last night said it ‘expects banks not to pay any cash bonuses to senior staff including all material risk takers’ and welcomed the suspension of dividend payments.

Echoing the need for restraint, the Institute of Directors said fairness in pay is more important than ever at a time when many businesses are on the verge of going bust as demand slumps and closures bite.

Edwin Morgan, the business organisation’s director of policy, said: ‘Ideally pay policy during a crisis should encourage everyone to pull together, and directors will want to show they are part of the team as staff and investors risk losing out.’

In the years following the financial crisis of 2007-09, firms faced a fierce backlash over perceived corporate excess at a time when many were still struggling.

But that did not stop enormous pay days for some of the country’s leading bosses, from the £70.4m Sir Martin Sorrell received in one year along to the £84.7m paid to Persimmon chief Jeff Fairburn over two years.

But with the coronavirus pandemic threatening our way of life, more than 150 businesses listed on the London Stock Exchange have suspended or axed their dividends so far this year, with the major banks acting last night.

These payouts would have given investors, including savers and pension funds, more than £15bn.

Some may even have relied on these dividends to provide them with an income. But while companies are cutting down on shareholder payouts to preserve cash, few have taken the axe to what are often seen as ‘excessive’ executive pay packages.

Advertising giant WPP yesterday became one of the latest to suspend its dividend and £950m share buyback, in total conserving £1.1bn.

It added that all members of its 19- strong executive committee and its board would take a 20pc pay cut to their salary for at least three months.

Willie Walsh, boss of British Airways’ parent company IAG, has also volunteered to take a 20pc pay cut for the rest of the year.

Chairman and chief executive of Banco Santander – Ana Botin and Jose Antonio Alvarez – both agreed to donate 50pc of their salary to charities helping fight the coronavirus crisis.

Gerard Lyons, former chief economic adviser to Boris Johnson and now chief economic strategist at wealth manager Netwealth, said: ‘If a firm finds that curbing pay temporarily may allow them to retain all staff, then it may make sense.’