Top Exec Pay Soars By 4,000% Over 30 Years

The enormous salaries paid to the UK's top executives are "corrosive" to the economy and damage trust in British businesses, according to a report by the High Pay Commission.

The year-long inquiry found the pay of top executives had increased by more than 4,000% in the past 30 years, compared to a mere threefold increase in the average worker's salary, fuelling the gap between the highest paid 0.1% and the rest of British society.

The report, Cheques With Balances: Why Tackling High Pay Is In The National Interest, criticised "stratospheric" pay increases, which it said distorted markets, drained talent from key sectors and rewarded failure.

The study detailed the pay of former Barclays' chief executive John Varley, saying he had earned £4,365,636 - 169 times more than the average worker in Britain, and an increase of 4,899.4% since 1980, when the top pay in Barclays was just 13 times the UK average.

The chief executive in the part state-owned Lloyds Bank has seen his pay increase by 3,141.6% to £2,572,000 over the same period - 75 times the average Lloyds employee.

In 1980, the top salary in the bank was just 13.6 times that of the average Lloyds worker, said the report.

Average wages in the UK today are a 'modest' £25,900 - up from £6,474 in 1980 - a threefold increase.

A survey of more than 2,000 members of the public to mark the report's publication found four out of five believed pay and bonuses for top executives were out of control.

Two-thirds did not think companies could be trusted to set pay and bonuses responsibly and most wanted Government action to make firms more transparent awarding executive pay.

High Pay Commission chairman Deborah Hargreaves said: "The growing pay gap between the top 0.1% and everyone else is increasing public disillusionment, damaging trust and fuelling the view that business leaders are in it for themselves.

"There's 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."

The report called for a number of reforms, including a "radical simplification" of executive pay, putting employees on remuneration committees and publishing the top 10 executive pay packages more widely.

It also said firms should publish the pay ratio between the highest-paid executive and the company median, and make firms reveal the total pay figure earned by executives.

The commission also said a new national body to monitor high pay should be established.

TUC general secretary Brendan Barber said: "Top directors seem to think that austerity is just for the little people. This is not just unfair, but bad for the economy as this vital report makes clear.

"Many of the report's recommendations - from allowing ordinary workers on to remuneration committees to give executives a much-needed dose of economic reality, to forcing companies to publish pay ratios between top directors and ordinary staff - can and should be implemented straight away.

"The truth is that the extraordinary transfer of wealth from ordinary people to those at the top is not just morally repulsive, but a key ingredient in the economic crash."