Pension fat cats face MP probe

Huge payments spark call for inquiry

DIRECTORS at some of Britain’s biggest companies could be hauled in front of MPs to justify massive pension payments being handed to bosses.

The controversial deals were last night branded ‘abhorrent’, with the work and pensions committee considering an official inquiry into the matter.

The likes of Lloyds, Tui and Burberry are in the firing line for paying bosses hundreds of thousands of pounds each year in retirement contributions on top of salaries.

Frank Field MP, chairman of the work and pensions committee, said there was particular concern about payments that, as a percentage of salaries, are well above those available to normal staff. He said: ‘We will be deciding whether the committee should do an inquiry into executive pensions. That does not just mean a few isolated cases, but the whole trend – it is pretty obvious this is an issue of fairness.’

The MP singled out Lloyds boss Antonio Horta- Osorio ( pictured), after the chief executive’s final salary pension – he was the only Lloyds employee still receiving the lucrative perk – was trimmed last week amid fury from staff.

‘This is someone who clearly thought he should be one of the last people on a final salary pension, when almost everyone else has been pushed down to something inferior,’ Field added. ‘It is hardly tolerable.’

The pressure from MPs comes as several blue chip companies are already scrambling to change their pay rules amid growing anger at big pension contributions.

Many use schemes not open to ordinary staff, who must settle for lower contributions than the top brass. British Gas owner Centrica, National Grid, British Land, Ferguson and Ashtead are among the firms reviewing their policies.

Labour’s Peter Kyle, a business committee member, added: ‘The practice of paying these huge pension contributions speaks to a cultural problem in some quarters of the private sector, where the focus seems to be constantly finding loopholes to exploit so bosses can receive extra remuneration. We have got to end this game of cat and mouse.

‘I would hope this is something most investors and remuneration committees find as abhorrent as the rest of us do.’

A Mail investigation last week revealed that as many as 54 companies in the FTSE 100 have been handing chief executives cash payments worth at least a quarter of their salary every year. The worst example uncovered was Tui chief executive Friedrich Joussen, who was awarded £489,000 in annual pension contributions – 51pc of his basic pay. The practice is now also facing a crackdown by the Investment Association, which represents

City shareholders.