The Return of the Corporate Fat Cat
Britain's top executives are enjoying a dramatic resurgence in pay awards, with government policy quietly facilitating their growing remuneration packages. According to Julia Hoggett, chief executive of the London Stock Exchange, corporate boards have become "much more forceful" in pushing through inflated compensation deals for CEOs and other senior leaders.
The numbers tell a striking story: median UK CEO pay surged by 11% last year to nearly £5 million, outpacing the already substantial 7.5% increase to $16 million (£12 million) seen in the United States. This push to "play catch-up" with international counterparts comes as average UK workers received pay rises of just 4.6% - less than half the percentage increase awarded to top executives.
Transparency Measures Dismantled
The mechanism enabling closer scrutiny of these pay awards has been quietly dismantled by the Labour government. Theresa May's Conservative administration had established a public register administered by the Investment Association that identified companies where more than 20% of shareholders voted against board proposals.
This register served as an "amber warning light" to corporations, signalling significant investor discontent. As Andrew Ninian, director for stewardship, risk and tax at the Investment Association noted, the register had "achieved its objective" in promoting engagement between boards and shareholders.
Yet Labour has now abolished this transparency measure, making it harder for the public and investors to track companies facing substantial shareholder opposition to executive pay packages.
Broader Regulatory Retreat
The removal of the pay register forms part of a wider pattern of reduced corporate transparency. The Financial Conduct Authority has simultaneously eased rules on short-selling, ceasing to publish the identities of hedge funds and other institutions engaging in the practice.
This deregulatory push comes amid significant business community dissatisfaction with other government policies, including higher national insurance contributions for employers, strengthened workers' rights, and substantial minimum wage increases.
The situation presents a striking political irony: a Tory-introduced corporate governance measure has been dismantled by a Labour government that simultaneously implements policies hitting working people through frozen income tax thresholds, reduced ISA allowances, and new charges for electric vehicle owners.
As median executive pay races ahead at more than double the rate of average workers, the disappearance of transparency mechanisms makes it increasingly difficult to hold corporations accountable for how they allocate shareholder funds - including the pensions and savings of ordinary Britons.
