Subscribe / Unsubscribe Enewsletters | Login | Register

Pencil Banner

More women on boards will curb excessive pay, says prime minister

CFOWorld.co.uk staff | Nov. 3, 2011
David Cameron said more women on boards will curb excessive pay outs to the country's top directors after a report revealed that directors' pay had increased by 49 percent in the last financial year.

David Cameron said more women on boards will curb excessive pay outs to the country's top directors after a report revealed that directors' pay had increased by 49 percent in the last financial year.

The prime minister was speaking at a news conference at the Commonwealth heads of government summit in Perth when he voiced concern about the dramatic rise in directors' pay.

The report by Income Data Services showed that the average total earnings of a FTSE 100 director is now around £2.7 million a year. The dramatic rise in earnings was attributed to an increase in average bonus payments -- up 23 percent from £737,624 in 2010 to £906,044 this year.

"This is a concerning report, particularly at a time when household budgets are very tight and people have difficult circumstances -- the increase in food prices and fuel prices, six million public sector workers on a pay freeze," Cameron said.

"At the moment I think there is too much of a closed circle of people made available to be non-executives. By opening this up, by increasing the number of women in our boards -- I think that would have a beneficial effect."

Cameron recommended three way of bringing down executive pay. First, transparency, by publishing numbers so that shareholders can compare and contrast salaries. Next, accountability: strengthened shareholders' responsibility for remuneration decisions.

 

Sign up for CIO Asia eNewsletters.