Any other business: To quell this divisive surge in top pay, we need less transparency, not more

‘The boom in top people’s pay is gathering momentum,’ I wrote before some of you were born — those of you who are still at school, that is. I went on to quote a leading industrialist of the day: ‘Shareholders won’t be able to stop it. Moderation will have to come through pressure of public opinion.’ Statistics from the same source two decades apart suggest public opinion has done a pretty feeble job.

In a piece headed ‘Snouts in the Trough’ (1 May 1993), I quoted an Income Data Services (IDS) survey of FTSE 100 companies whose chief executives had received average annual pay increases in the depths of the 1991-92 recession of 15 per cent, to £463,220. The survey noted that, as the economy deteriorated between 1989 and 1992, the divergence between chiefs’ and manual workers’ pay became steeper, and that in companies whose earnings per share had fallen, nine out of ten still gave bosses a fat rise.

Adjusted for inflation, £463,220 in 1992 is worth £780,000 today; adding a performance bonus to reflect the fact that the FTSE narrowly beat inflation might take the figure to £900,000. But last week, a new IDS survey showed chief executives collecting average increases for last year (in which their staff got 2-3 per cent rises at best) of 43 per cent, to £3.9 million. So in all the years I have been writing about the socially divisive nature of this trend and the impossibility of justifying it in performance terms, the fat cats have multiplied their take more than fourfold.