Bosses’ pay: “no end in sight” to CEO pay inflation?

Forget the Olympics, said Jonathan Guthrie in the Financial Times. For a really athletic performance, you could hardly do better than the “2015 pay Olympiad among FTSE 100 bosses”. Here the motto was not “faster, higher, stronger”, but “higher, even higher and really so high it’ll make your eyes water”. Average CEO pay rose by 10% to £5.5m last year, according to the think tank High Pay Centre. The “stand-out champion” was adman Sir Martin Sorrell of WPP, with “a cloudgrazing” £70m. Awkwardly, the news coincided with a letter from business groups to the Government protesting plans to raise the minimum wage to £9.02 an hour by 2020.

We’ve become almost “inured” to this annual trough-fest, said Alex Brummer in the Daily Mail. But it is particularly iniquitous “when real wages are barely growing”. Last year, the average blue-chip CEO was paid 129 times more than the average employee; less than 20 years ago, the ratio was 49 times. It’s not just the vast sums that offend, said The Guardian. It’s their “opaque” connection to the long-term prosperity of companies. Happily, resistance is mounting. Theresa May made curbing pay part of her leadership pitch. If she’s serious about piling in on the issue, she’ll “find the door already ajar”.

The Government should beware the “unintended consequences” of heavy-handed legislation, said Jonathan Guthrie, but it should certainly “nudge”. Requiring companies to consult workers, for instance, would help counterbalance the “flawed advice” of pay consultants. High Pay Centre director Stefan Stern concludes there is “no end yet in sight” to CEO pay inflation. That seems overly pessimistic, said Jack Torrance in Management Today. Given the sheer momentum for change, “FTSE bosses will likely find themselves carrying lighter wallets in the near future”.