Following the release of Vince Cable’s proposals for tacking excessive executive pay, please find below a comment from Esther Smith, Employment Partner at law firm Thomas Eggar LLP.
“There has been a great deal of commentary about Vince Cable’s proposals to deal with the thorny issue of excessive executive pay, not much of it complimentary! “Given that many of the issues that lie at the heart of the executive pay dispute are cultural or institutional issues, it is not a matter that is going to be resolved to everyone’s satisfaction overnight. The matter is inherently political and there is a high level of public resentment, understandably, at employees of nationally owned banks receiving excessive remuneration. People seem somewhat less exercised over successful private companies, providing high levels of employment and business opportunity for the UK, paying their top executives top dollar for the jobs they do. “This debate is however, a very interesting one to be having alongside the ongoing discussions about capping benefit income at £26,000.
“There seems to be a focus, not entirely inappropriately, on what individual people are getting by way of income, whether earned or received as benefits, and the affordability of those payments. Would it not be healthy for the economy to be focussing on how to raise the income of the businesses paying high salaries to executives, which in turn create tax and National Insurance revenue for the UK, and the country as a whole, so that the need to slash benefits is not so great? I appreciate that austerity requires us to look at cost savings as well as ways to increase income but it would be encouraging to see a little more emphasis on growth opportunities.”