Britain: Bosses’ pay skyrockets

Top bosses’ pay keeps going up and up. A recent survey by the Guardian newspaper found that the senior directors of the UK’s biggest 100 companies increased their income by a staggering 23% last year alone. That was seven times faster than average earnings.

It now means that on average a chief executive can expect to pocket £1, 677,685 a year, when share options are taken into account. 190 directors received over £1m in 2002 – up from 130 in 2001.

The survey highlighted the example of Brian Gilbertson, the former head of BHP Billiton mining company. Gilbertson was on the receiving end of a whopping £9.1 million last year. He was removed as chief executive – not for his obscene pay rise obviously as his "golden goodbye" was worth a further £16m.

What is incredible is that since 2000 the stock market value of these companies has fallen by almost half. Yet at the same time boardroom bosses pay has rocketed by more than 84%.

This paper has campaigned consistently for the major companies to be brought into public ownership under democratic working class control and management.

In our last issue we highlighted the need to bring the major supermarkets into public ownership. This point was underlined by the Guardian’s survey which found that all eight full time directors of Tesco "earned" more than £1m last year. Unilever had seven directors and BP six who all got over the £1m mark.

It’s not only salaries, share options, golden hello’s, goodbye’s and parachutes that the fat cat bosses can negotiate. Pension pay-offs have also increased dramatically at a time when companies are closing down final salary pension schemes for their workers.

Sir Richard Sykes the former chairman of GlaxoSmithKline has £15.2 m in his pension pot. It earns him a further £729,000 a year in income.

GSK’s Jean Pierre Garnier has the biggest pension of all. He is guaranteed an annual income of £929,000.

A pensioner on a state pension would have to live a further 232 years after retiring to earn what Garnier will earn in 1 year. Oh and he’s only 55.

If for no other reason it’s time to step up the fight to bring the multi-national corporations into public ownership and introduce a democratically planned socialist economy. This could use the multi-billion pound corporate profits and personal fat cat wealth to abolish poverty and inequality for good.

This article was taken from the August/September issue of International Socialist, newspaper of the CWI in Scotland.

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August 2003