Chuka Umunna MP, Labour’s Shadow Business Secretary, commenting on Manifest’s report on FTSE 100 executive pay, said:
“Manifest’s survey shows that the median increase in FTSE 100 CEO pay was 10% last year, well above inflation and at a time when the FTSE 100 index fell by 5% - so clearly there is a disconnect between pay and performance. In light of these staggering figures, where pay hikes are not matched by increases in shareholder returns, it is not surprising that investors have adopted a more activist approach on remuneration.
“That the Conservative led Government is rowing back from introducing annual binding shareholder votes on remuneration, at a time when shareholders are taking a much firmer line on these matters, shows just how out of touch with the investor community they have become.
“In order to build a more productive and responsible capitalism, it is important to ensure we bring an end to excessive pay and rewards for failure, which are bad for our economy and bad for business. The Prime Minister and Chancellor sought to insinuate that proponents of reform in this area were being “anti-business” but the recent wave of shareholder revolts has shown how they have completed misjudged the public mood.
“We need to strengthen and empower shareholders, so that they can clamp down in cases where there are excessive awards. Labour has called on the Government to do this, for example by putting employee representatives on remuneration committees, requiring fund managers to disclose how they vote on pay deals, and for firms to publish the ratio of the average pay of a worker to that of the highest paid executive. Instead, ministers who promised to stick up for shareholders are now, yet again, sticking up for the wrong people.”