Stop the fat cats? Labour too busy pandering to unions, says RUTH SUNDERLAND

Theresa May followed our first Fat Cat Files report into the salaries and perks paid to top executives of FTSE 100 companies with a bid to tackle boardroom excesses.

She ordered a list to be compiled of companies where there had been a significant shareholder revolt against overly generous pay. The idea was to name and shame companies that she described as “damaging to the social fabric of our country.”

The register, which still exists, is a table of companies where at least one in five investors protested compensation at the annual meeting. The hope – as it turned out, a vain hope – was that this would put the brakes on executive pay.

Our latest Fat Cat salary report shows that while salaries have increased, shareholder revolts have declined.

Perhaps investors in the big cities who run our businesses on our behalf have simply lost the will to object when confronted with the stubborn attitude of the high-wage culture.

We’re not quite as far along here as in the US, where coffee chain Starbucks offered its new CEO Brian Niccol a deal that could see him earn up to $100 million (£76 million) in his first year.

The ridiculous arrangement means he gets to use the company’s private jet three days a week to travel the 1,000 miles from his home in California to the Seattle office.

Such a level of generosity would still be considered obscene on this side of the Atlantic. Especially in a company like Starbucks, where ordinary baristas are paid very modestly and tax payments, at least in this country, are minimal.

If Niccol receives his full performance-related package, it would be much higher than Starbucks Coffee Company’s (UK) tax payment of just £7.15m last year, compared with revenues of £548m and gross profit of £149m.

During Covid, a number of Footsie bosses decided to forgo bonuses in solidarity with their struggling customers and staff. They are now making up for lost time: pay has skyrocketed and their perks are still shameless.

Why is it so hard to stop greed?

The talent market is international, and some FTSE 100 chief executives are advocating US-style packages, despite the fact that the companies they run are generally smaller and less cutthroat. Niccol’s predecessor, former Reckitt Benckiser CEO Laxman Narasimhan, was brutally sacked after a very short tenure, which is less common here. A big boss who tries to dispense with mammon would not be popular with the next tier of senior managers, since his or her rewards would put a cap on theirs.

I suspect that’s why Chris O’Shea, the CEO of Centrica, which owns British Gas, started accepting his bonuses after going without for a few years.

Those at the top of the payroll, Pascal Soriot at AstraZeneca, Tufan Erginbilgic at Rolls-Royce and Charles Woodburn at BAE Systems, have performed well and delivered handsome rewards for investors. The same cannot be said of others.

And can individuals be given credit for price increases that are influenced by factors beyond their control, and for performance that is a collective achievement?

The new Labour government does not seem to be too concerned about top pay, saying it is a matter for shareholders alone.

Theresa May was closer to reality when she said that excessive pay undermines society. Perhaps Labour is too busy pandering to union barons to pay attention to boardrooms, but it seems odd to be so complacent.