Tired of Banker’s Bonuses? It’s about time we all Have Our Say on High Pay!

"Over the past decade, while executive pay has grown by over 323%, the average UKearnings have grown by a mere 54%. Across the nation, ordinary workers have felt outraged by the continuing gap between the lowest and the highest paid earners but felt powerless to do anything. This growing inequality is particularly distasteful considering the current economic situation, with high unemployment and pension cuts creating hardship for many.

But how can we tackle this culture of excess? Vince Cable thinks that it is up to the shareholders of companies to hold the boardroom to account. However, despite the vast increases in bonuses and single performance incentives, not to mention “Golden Hellos” (a hefty sum paid to attract talent to the company), average levels of shareholder dissent have been stuck at around 9%, with outright defeat for these pay packages at annual general meetings remaining a rare spectacle.

We all have the power to influence these shareholders, who are mainly compromised of institutional investors. These anonymous ‘institutions’ are, among others, the pension funds and insurance companies who look after our retirement savings. In other words, the owners of corporate Britainare no longer a few rich individuals: they include anyone with pension savings, or around 11 million of us. This is our money!

The responsible investment charity FairPensions has launched ‘Your Say on HighPay’ at www.fairpensions.org.uk/highpayThis online action tool will email your pension fund or ISA provider telling them you want them to vote against excessive pay – and asking them to let you know about it. 

Whether the ‘Shareholder Spring’ proves to be a one-season wonder or something more permanent may yet be up to us". (Great guest post by MM).

Shareholder Spring: Employee reps to stop crony capitalism

I was astonished to read in today's Evening Standard (of all papers) that its City Editor, James Ashton, supported as the only "surefire way for any board to keep in touch with reality" over executive pay, is to appoint employee representatives to the

board "to keep them honest".

The background to this is the revolts by shareholders (or rather asset managers not by and large the actual share owners) at Company Annual General Meetings (AGM) over excessive and unearned top executive pay. Yesterday the boss of insurance giant Aviva was forced to resign after his pay package was rejected at its AGM. So were the bosses of drugs giant AstraZeneca and Trinty Mirror. Tomorrow apparently the British Gas Centrica CEO is also in big trouble.

At a pension conference recently on executive pay I asked Government Cabinet minster Vince Cable why it was thought a good thing that employee representatives were legally required to make up to 50% of the trustee board of a company pension fund, making decisions that could make or break the organisation, yet there was no requirement to have even one such rep on the same company remuneration committee? He claimed to support the principle of employee reps but that the role of a pension trustee was very different to being on a company remuneration committee (which is completely rubbish not least since many employer reps on pension schemes also sit on you know what committees!)

I must admit to agreeing with James Ashton's conclusion that the employee representation "model has been proved to work elsewhere in Europe. What better way for the chairman to keep in touch with the shopfloor than to have the shopfloor turn up in his boardroom once a month? It could make for some uncomfortable meetings".

Update: I'll post on the campaign by Fair Pensions on how ordinary people can take action against executive High Pay soon.

Sleeping with the enemy: Ken's offer to Vince about bringing down the Coalition

Today there was a London Labour Party Manifesto meeting at Congress House.  I missed the morning session due to my Council surgery and a Fair Pensions Training on shareholder Activism (which I had to leave early). 

Ken gave a keynote speech to the meeting after lunch and was on form.   He compared the 77% of funding that Boris received during the last Mayor campaign from City Bankers and Hedge fund managers with the 80% he received from trade unions and trade union members. Unlike Boris he was proud of his funding.

Boris is planning to increase fares by 2% above inflation for the next 20 years. If he is elected Ken has pledged to cut tube fares by 7% and bus fares by 11%.

On Housing issues Ken spoke passionately about a London Living rent and a GLA rental agency. He also reaffirmed his commitment to work with London Council (and the LPFA which the Mayor runs) pension funds  to get them to fund investment in Housing. I will of course declare an interest in this subject. I also have never understood why British pension funds do not invest in residential rental properties?

Ken being Ken had to say something to bring a smile to our faces. His despair at this present Coalition government and his wish for it to fall led to him making a typically "Ken" offer to even sleep with Vince Cable if this meant the government would "fold".  An offer that Vince will no doubt....