Executive pay should be radically simplified to halt spiralling high pay creating inequalities last seen in the Victorian era, according a report from the High Pay Commission.
The report, Cheques and balances: Why tackling high pay is in the national interest, was released on 22 November after a year-long inquiry.
It showed ‘stratospheric’ pay increases, which have seen wealth flow upwards to the top 0.1% away from average workers.
It set out a 12-point plan based on transparency, accountability and fairness.
The High Pay Commission’s reforms include:
- A radical simplification of executive pay.
- Putting employees on remuneration committees.
- Publishing the top ten executive pay packages outside the boardroom.
- Forcing employers to publish a pay ratio between the highest paid executive and the company median.
- Forcing employers to reveal total pay figure earned by the executives.
- Establishing a new national body to monitor high pay.
Deborah Hargreaves, chair of the High Pay Commission, said: “There is a crisis at the top of British business and it is deeply corrosive to our economy.
“When pay for senior executives is set behind closed doors, does not reflect company success and is fuelling massive inequality, it represents a deep malaise at the very top of our society.
“The British people believe in fairness and, at a time of unparalleled austerity, one tiny section of society – the top 0.1% – continues to enjoy huge annual increases in pay awards.
“Everyone, including each of the main political parties, recognises there is a need to tackle top pay. That is why we are saying there must be an end to the closed shop that sets top pay, and that pay packages should be clear, open and published to shareholders and the public.”
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