Labour Research May 2002


TUC demands fat cat restraint

The huge pay gap between directors and their employees has continued to rise despite opposition from the public, says the TUC.

The organisation is calling for the government to bring in rules on disclosure of pay and restraint via shareholder votes.

A TUC report, Executive excess - time to act, shows that, between 1994 and 2001, basic pay rises for directors outstripped those for their average employees by a factor of three to one.

Analysis of the annual reports of companies shows that the midpoint annual salary and bonus for the highest paid director grew from £201,000 in 1994 to £416,073 in 2001, an increase of 107% over the seven-year period.

Meanwhile average employee pay in those companies rose by just 31% over the same period, from £19,272 to £25,223.

TUC general secretary John Monks said: "With such excessive pay packages for company directors it is becoming clear to staff that there's one rule for us and one rule for them. Indeed, the obscene pay-offs for directors leaving failing companies is more like throwing good money after bad."