ACCA slams 'fat cat' proposals
The payments by companies to chief executives should be disclosed as a multiple of the average employee earnings in a bid to tackle so-called 'fat cat' salaries, according to ACCA.
Link: Legislation on fat cat pay unlikely
In response to the government consultation document Rewards for Failure the institute claimed the proposals for more legislation would not address the root of the problem.
It added that the solution would more easily be found through better initial disclosure of contract terms, greater emphasis on empowering smaller shareholders and boosting ethical awareness of the directors themselves.
‘Concerns over “fat cat pay” are part of the current lack of trust in capital markets,’ said Paul Moxey, ACCA’s head of corporate governance.
‘Solutions are needed which include measures to ensure ethical awareness and greater transparency – issues which, unfortunately, the Financial Reporting Council failed to make explicit in its new Combined Code on Corporate Governance. Board members themselves must start displaying more sensitivity to the relative balance of their pay and others in their company – CEOs in the top 100 UK companies are typically paid 80 times as much as the average worker.?