A letter to the Editor of the Daily Telegraph which was published on 28th January 1995.

Your City Comment (Jan. 26th) and leading article (Jan. 27th) on the Greenbury Committee set up to head off legislation restraining boardroom salaries will provoke a wry smile from those thousands of your readers who have lost their jobs due to “restructuring”.

One might as well expect a committee of casino owners to propose effective rules for restraining gambling as to expect the Greenbury committee to propose anything serious on salary levels.

In place of the Government’s ineffectual deploring of boardroom excesses, here are a few specific proposals which could easily be carried out:

• Abolish share options.  These encourage the short-term pushing up of the share price (usually accomplished by “restructuring””) instead of the long-term building of business, which should be encouraged.
• Amend the Companies Act so that any bonus or profit-sharing is paid at the same percentage of salary to all employees, including directors. After all, directors are already paid many times the salary of the average employee.  There is no reason why any bonus, which is earned by the whole company, should be divided disproportionately to salary.
• In considering a salaries code of practice, take an example from the world’s most successful industrial economy, Japan, where the chairmen of even the largest corporations rub along on about 10 times average salary rather than the 30 or 40 times which has become the norm here.

 
If certain chairmen of United Kingdom corporations aspire to salaries, applying in the United States, let them resign their jobs here and take their chances in that country.

A letter to the Editor of the Daily Telegraph which was published on 28th June 1988.

Your strictures (editorial, June 25th) on the recent payments to Sir George Jefferson and other displaced chairmen are well merited, but I doubt that the financial institutions will provide an effective restraining factor.

Besides excessive payments for loss of office, the salaries of the directors of major corporations have leapt up at many times the rate of real profitable growth in their businesses.  This gives a whole new meaning to the phrase “unearned income”.  Indeed, British corporate managers in some sectors are fast gaining a reputation not so much for creating capital as for conferring it on one another.

To restore a reputation for the responsibility in pay matters which it is so often commending to its workforces, the CBI should produce a code of practice on directors’ pay and compensation.  By citing this in an action against a board acting irresponsibly in pay matters, private shareholders would recover some of the power they have lost to the institutions.