MAY SAVAGES ‘ ABHORRENT’ GREED OF FAT CAT BOSSES

Astonishing declaration of war on ‘unacceptable face of capitalism’ by PM

THERESA May today launches an outspoken new war on ‘ fat cat’ bosses and accuses them of wrecking Britain’s ‘social fabric’.

Announcing in The Mail on Sunday new moves to prevent greedy company chiefs paying themselves millions of pounds more than they are worth, she says they are vital to stop a crisis of confidence in big business. Under Mrs May’s reforms, if one in five shareholders complains about ‘fat cat’ pay deals, they will be named in a public register – with the risk that investors

will take their money elsewhere. Similar measures will expose executives who earn hundreds of times the amount of ordinary workers on the same company payroll.

And Mrs May controversially invokes the words of former Tory Prime Minister Sir Edward Heath, who denounced ruthless 1970s tycoon Tiny Rowland as the ‘unacceptable face of capitalism’.

The Government crackdown, which faces opposition from some Tories who claim the PM is ‘flirting with anti-capitalism’, comes as an investigation by this newspaper exposes the luxury lifestyle of one of Britain’s burgeoning breed of ‘fat cat’ bosses.

Our probe reveals how Peter Crook, the discredited boss of Provident Financial, earned more than £40 million in just ten years from selling high-interest loans to the poor and needy.

In the last year alone, Mr Crook pocketed a staggering £6.3 million in pay and bonuses – more than the chief executives of the Big Four banks, HSBC, Barclays, Lloyds and RBS, long regarded as the epitome of excess pay.

He was forced out after his firm stunned the City last week by revealing its lending business was in chaos and that it was being investigated by regulators.

A staggering £ 1.7 billion was wiped off Provident’s market value in a single day – a record fall of 66 per cent of its value – as a result of Mr Crook’s botched reorganisation of the 137-year-old lender.

The Bradford- based firm has made Mr Crook a millionaire many times over, despite his sudden exit last week.

Provident is the biggest player in the market for short-term, highinterest loans, making hundreds of millions of pounds of profit in recent years from vulnerable customers, many of whom are on state benefits.

The firm’s share price recovered some ground on Friday after it announced personnel changes, but it still finished the week 50 per cent lower.

Its former chief executive, who last month insisted his firm was on the ‘ road to recovery’, owns a £3 million country estate set in 43 acres. The property boasts its own champagne bar, swimming and spa complex, and equestrian centre.

Meanwhile, 800,000 customers of Provident, who have helped make hi m a multi- milli onaire, f ace uncertainty over the future of their loans.

In her Mail on Sunday article today, Mrs May says ‘the excesses and irresponsibility’ of a minority of grasping big business moguls threatens to undermine trust in free enterprise and ‘damages the social fabric of our country’.

Big business forms ‘the backbone of Britain’s economy’, she says – and is vital to provide the cash for schools and hospitals. ‘But too often i n recent years we have seen another, unacceptable, face of capitalism,’ she argues.

Some firms have ‘ deliberately broken rules to protect their workers’, while others have ‘awarded pay rises to bosses that far outstrip the company’s performance’.

Responsible businessmen and women ‘abhor’ such conduct, writes Mrs May. It also plays into the hands of hard Left protesters who ‘hate business’.

The moves are a slimmed-down version of wider curbs on boardrooms promised by Mrs May in the aftermath of the Sir Philip Green BHS pension scandal.

Chancellor Philip Hammond vetoed putting workers’ representatives on boards. And Mrs May’s weak Election performance forced her to ditch moves to let shareholders vote on bosses’ pay. But even the watered-down proposals face criticism from some pro-business Conservatives.

Tory MP George Freeman, a former head of the No 10 policy unit, last night accused Mrs May of ‘flirting with anti-capitalism’.

He said her Election campaign had showed a ‘woeful lack of championing of British enterprise’. Although it was right to oppose ‘fat cattery’, argued Mr Freeman, it should not come at the expense of ‘promoting real entrepreneurship’.

A wider Mail on Sunday investigati on i nt o t he pay of s ome of Brit ai n’s wealthiest FTSE bosses has shown how some have continued to get richer despite a lacklustre performance by their companies and rebellion among their shareholders.

John Fallon, chief executive of publishing giant Pearson, and Bob Dudley, of BP, have received huge pay hikes in recent years at the same time as their companies posted multi-billion pound losses. WPP boss Sir Martin Sorrell earned £48 million last year. In the past, Sir Martin has enjoyed perks including £274,000 a year to fly his wife around the world with him on business trips.

WPP’s shares have fallen in the l ast 12 months by al most 20 per cent.

Briti s h Gas owner Centrica awarded i ts boss Iain Conn a £1 million rise this year, taking his pay to £4.1 million. The hike was condemned by campaigners, who pointed out that one in ten British households is living in fuel poverty.

There is no suggestion of wrongdoing by these individuals, nor Government criticism of them.

However, if shareholders do wish

Bosses who ignore revolts will be named

to complain about their pay, Mrs May’s reforms will make it easier for them to do so.

She writes: ‘ By the end of the year, the names of those firms that have faced a shareholder revolt over salaries and bonuses will be published on a new public register.’

If the bosses don’t deserve the pay rise, investors can ‘take their money elsewhere’.

She adds: ‘When big businesses are brought into disrepute, public trust in an open, free-enterprise economy is weakened.’

Failure to act risks a revival of the ‘ruinous ideology’ that caused ‘economic chaos and stagnation in Britain the 1970s’ and whose ‘fullblooded version has produced the tragic waste of potential we now see playing out in Venezuela’.

In place of earlier plans to force companies to give workers a seat on the board, a less radical measure to instruct firms to give them a ‘ louder voice’ has been agreed. Companies would be expected to have ‘either an employee advisory panel, or a dedicated board member, or an employee representative on their board,’ says Mrs May.