Labour could give customers binding vote on pay of top companies’ bosses
3 min read
The top executives at thousands of British companies could have their pay decided by customers and staff, under new proposals being considered by Labour.
A report commissioned by Rebecca Long-Bailey and John McDonnell said stakeholders at 7,000 of the country’s biggest firms could be given an annual binding vote on salaries in a bid to clampdown on fatcat salaries.
The party said that it would examine the findings drawn up by a team led by Prem Sikka, a professor of accountancy and finance at Sheffield University, and seen by The Guardian.
The document says customers are “the backbone of all enterprises” but are increasingly poorly treated “through profiteering by banks, gas, water, electricity and other companies”.
“They should be empowered to penalise executives delivering poor goods/service and equally also reward those delivering high quality products and services,” it adds.
Other proposals include scrapping all forms of share options, which can “invite abuses”, and an end to "golden handshakes".
It calls for all UK firms which employ over 250 staff to reveal the names of employees paid more than £150,000 a year, while dishing out heavy fines for directors that fall short of paying the minimum wage.
Elsewhere it says company law could be amended to give stakeholders the right to propose a cap on executive pay and bonus packages.
And it could make companies publish the difference in pay between its top brass and employees, analysed by gender and ethnicity.
Welcoming the report, Shadow Business Secretary, Ms Long-Bailey said: “Whilst many of our businesses work hard to ensure that rewards and prosperity are fairly shared across their workforce, there continues to exist a pernicious corporate culture in some firms that many across Britain would view as immoral.
“It cannot be right that in just three working days, the UK’s top bosses will have made more money than the typical full-time worker will earn in the entire year.
“Labour will look closely at the recommendations of this report as we seek to build on our existing policy of tackling pay inequality.”
The study follows research by the International Labour Organisation this week, which showed that wage growth in Britain had been the weakest of nine advanced countries over the past decade.
Shadow Chancellor Mr McDonnell said: “Coming on the heels of the International Labour Organisation’s report on Monday, the scale of bonuses and the opaque way they are paid should be a source of shame to those running our economy.
“The government have shown no interest in tackling the causes of inequality in our society and we are grateful to Prof Sikka and his team for shining a light on the problem.”
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