Let customers have a voice on fat cat pay, says Labour

LaBOUr could give customers a say on executive pay under plans to clamp down on fat cats.

the party welcomed a report saying the salaries of directors at 7,000 large companies should be subject to an annual binding vote.

the report on how to curb boardroom excess was commissioned by Labour business spokesman rebecca Long-Bailey and Shadow Chancellor John McDonnell.

It said stakeholders – including consumers and employees as well as shareholders – should have a voice.

asked about the proposals, Mr McDonnell told the BBC: ‘I am very attracted by them because I think it addresses an issue that people want addressing, the inequality and unfairness at work.

‘Some of the pay increases that we’ve seen are obscene. I can remember campaigning in the 90s when chief executives’ rates of pay were sort of 20 or 30 times higher than the average worker and their companies. they

‘Inequality and unfairness’

are now 145 times. People find that offensive. the wealth is created by the workers within those companies and many of them are on low wages and increasingly insecure work and they’ve had wage cuts for the last eight years.

‘the scale of bonuses and the opaque way they are paid should be a source of shame to those running our economy.’

the report was drawn up by a team led by Prem Sikka, professor of accounting and finance at Sheffield University.

It calls for remuneration to be in cash, rather than rewards in share options, shares and perks, which ‘invite abuses’.

Boss and employee pay gaps, along gender and ethnic lines, should also be published, the report found.

Company law would be amended to give stakeholders the right to propose a cap on executive pay and bonuses.

the report says inequitable distribution of the wealth generated by ‘the brawn and brains of employees’ is a key social problem.

Miss Long Bailey said: ‘It cannot be right that in just three working days, the UK’s top bosses will have made more money than the typical full-time worker will earn in the entire year. Labour will look closely at the recommendations of this report.’