Will executive pay pop up in Theresa May’s manifesto? An objective of her snap election is to secure a larger majority on the basis of a smaller burden of manifesto promises than she inherited from David Cameron. But in her only leadership campaign speech last July, her reference to ‘an irrational, unhealthy and growing gap between what those companies pay their workers and what they pay their bosses’ was one of the phrases that caught the most attention.
Back then, she was in favour of imposing annual binding shareholder votes on boardroom remuneration, as well as spotlighting the ratio between chief executives’ and average workers’ pay, and even forcing companies to accept workers’ representatives on boards. At last November’s CBI conference, however, she backed away from that last threat, resorting instead to what I described as ‘mood music’ designed to lure corporate support for her Brexit stance with talk of the lowest corporate tax rates in the G20 and more state cash for research and development. A green paper on corporate governance reform published in the same month made no new ripples, and was spun largely as a threat to bring listed company rules to bear on large private businesses — such as, of course, those owned by that season’s pantomime villain, Sir Philip Green.
Now that Sir Phil has coughed up for the BHS pension fund and sailed over the horizon, the level of tabloid and public hostility to fat cats has subsided. So perhaps there’s no political need for the Prime Minister to tie herself to manifesto promises that would cause corporate disgruntlement at a time when she needs UK plc to be performing at its competitive best — even if that means allowing the greedy bastards that run it to go on grabbing grotesque rewards.
Labour’s John McDonnell says he will cap the top-to-average pay ratio by law in companies that seek public procurement contracts; by backing away from anything of the sort, the Tories can burnish their credentials as free-market champions.
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