[rb_inline_related]TUC general secretary Francis O?Grady went so far as to say the plan was a fraud ? ?Just a year ago May?repeatedly proposed?fundamental reform of business.?That?s because there was real public concern about boardroom greed, about tax avoidance and exploitative works practices at the likes of Sports Direct. This response, I?m afraid, is feeble.? Simon Richardson, senior lecturer in human?resource management at Westminster Business School, noted that?the measures ? a register for companies and the publication of pay ratios ? will lead to greater transparency. He echoed O’Grady’s sentiment, however, in saying it fails to “provide the ultimate sanction.” He added: ?The reason that average FTSE 100 CEO pay packages reduced by 17?per cent from ?5.5m in 2015 to ?4.5m in 2016 is probably because those deciding the pay packages were aware of shareholders’ likely power to?veto as a result of annual majority vote becoming binding rather than advisory with the new legislation. ?Some argue the drop in FTSE remuneration is because packages in 2016 were?reined back as a result of the three-yearly binding vote on new policy. Yet?this seems like wishful thinking: if the good intentions included in the executive pay policies do not turn out as intended, there will be no way to lock the gate after the horse has bolted at subsequent AGMs. ?While the reduction in average CEO pay is a welcome development, the fact is that CEO pay has more than quadrupled in the past 20 years, while average UK worker pay has only increased by 50?per cent over the same period. “As such, many would see this executive pay trend needing to be kept under control for some time to come. The pay transparency requirements in the new legislation will provide a welcome window into the CEO pay debate, but the shareholders still need more control of?the process.?
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