At a time when most workers are facing job cuts, figures are out showing that the pay of FTSE 100 directors increased by 55 per cent in the twelve months to June. The pay of directors in the FTSE 350 increased by 45 per cent. Incomes Data Services (IDS), who conducted the research, also reported that bonuses increased for FTSE 100 directors by 34 per cent while basic pay raises increased only 3.6 per cent.
Steve Tatton of IDS said the report showed that companies appear to have returned to practices of the past of “business as usual” now that the recession has ended.
Tatton said: “It seems the days of earnings restraint were short-lived. It is as though the recession never happened.”
“This time last year a number of companies actually reduced their bonus ceilings. Twelve months later it appears as if these measures have been reversed, with around 40 companies reporting higher bonus scheme maxima.”
Vince Cable, who had announced earlier this week that it was time for executive pay to “come back down to earth”, called for a review of corporate pay. Cable said: “We have to question whether it is linked closely enough to company performance. I’m determined to take a really close look at these important issues and want to see a wide response from industry to my review.”
Unions were angered over the report. TUC general secretary Brendan Barber said: “These mega-pay rises blow away any claim that we are all in this together. While the poor and those on middle incomes lose out from cuts and pay squeezes, top directors continue to take home telephone number salaries without being overly troubled by tax.”