Measures to reduce executive compensation have failed, according to a thinktank | Business

The measures taken by the British government to combat excessive compensation of leaders have failed, according to a new study by a think tank.

Between 2014 and 2018 – the first five full years of the crackdown – all pay policies submitted to an annual meeting of a FTSE 100 company have been approved by shareholders, reported the High Pay Center.

In 2016, in anticipation of becoming prime minister, Theresa May proposed allowing employee and consumer representatives to sit on the company's board of directors before going back on the plan.

In 2012, David Cameron, the Prime Minister of the time, announced a crackdown on excessive remuneration of leaders. As a result, the 2013 Business and Regulatory Reform Act gave shareholders a binding – and not advisory – vote on their company's executive compensation policy at least once every three years. This is in addition to the existing advisory vote on a company's compensation report detailing what it had paid to directors the previous year.

Investors, however, do not seem willing to use this power to limit excessive executive compensation. Last year, a slim majority of people approved a controversial £ 75 million bonus to Persimmon homebuilder CEO Jeff Fairburn, despite widespread anger.

The High Pay Center also found that of the more than 700 compensation resolutions voted at annual meetings during the period, the average shareholder dissent level was 8.8%. Only 11% of compensation-related resolutions attracted more than 20% dissenting votes. And only six advisory votes on compensation packages awarded in previous years were rejected, representing "just 1% of the total".

The results are achieved despite the median compensation levels of CEOs reaching £ 3.9 million in 2017, the last year for which full figures are available, an increase of 11%. That's about 137 times the annual salary of the typical British worker, said the think tank.

"Polls have repeatedly shown that the public supports more significant measures to tackle very high economic and wage inequalities, including ceilings for the highest salaries and employee representation on boards of directors" , he added.

Executive salaries continue to skyrocket: a few days ago, MPs increased the pressure on the Lloyds banking group on excessive pensions of senior executives, while last week it was revealed 19.1 £ 2018, potentially exposing the company to the risk of conflict with its shareholders.

Reflecting on this study, Rebecca Long-Bailey, executive secretary of the shadow, said: "Today 's findings sadly tell us what we already know: Conservative policies do not help. have not allowed to combat the excessive remuneration of executives in some companies, which contributes to the rampant inequality. "