Guardian UK: European anger at 'social scourge' of excessive executive pay

[marmar]

European anger at 'social scourge' of excessive pay
Day three of the Guardian/Reward Technology Forum survey

David Gow in Brussels
guardian.co.uk, Friday September 12 2008 16:20 BST




The "social scourge" of excessive boardroom pay has prompted widespread debate in the European Union as workers see their purchasing power eroded by ­rising prices and low wage increases. European political leaders have demanded a legal and fiscal clampdown.

Shareholders, especially retail investors, are pressing for greater corporate disclosure of remuneration policy, inc­lu­ding links to performance, and individual directors' pay packages as well as votes on the issue at annual meetings.

The pay debate has been exacerbated by the credit crunch, which has exposed undue risk-taking in the search for higher bonuses by highly paid investment bankers and high-profile severance packages for failed executives, deepening the sense of outrage in mainland Europe, which is culturally more egalitarian than the US or Britain.

Even before Pat Russo, chief executive of serially loss-making IT firm Alcatel-Lucent, quit in late July with a contractual pay-off of up to €6m (£4.8m), French president Nicolas Sarkozy had produced draft laws to curb such "golden parachutes".

The Dutch government has introduced legislation for a 30% tax on bonuses of more than €500,000 and a 15% increase in employer's fiscal contributions to executive pensions, partly influenced by the multimillion pay-off for ABN Amro chief Rijkman Groenink.

In Germany, where workers' pay rose only 4.3% between 2003 and 2007 as firms laid off hundreds of thousands of employees, Social Democrats are demanding a €1m ceiling on tax-deductible boardroom remuneration. ......(more)

The complete piece is at: http://www.guardian.co.uk/business/2008/sep/12/executivesalaries.europe