Restoring Responsible Ownership - new paper by Chris Philp MP
A forceful and persuasive contribition to debate from the Conservative member for Croydon South
The High Pay Centre was delighted to be contacted by Chris Philp MP at the beginning of April this year. He told us that he wanted to make an intervention in the ongoing debate over inadequate corporate governance and unjustified, excessive pay at the top.
A healthy and constructive dialogue led to his authorship of this new paper (below). While the High Pay Centre does not necessarily endorse every single element of his paper, we greatly welcome his contribution and salute his political initiative - and courage - in setting out his stall. Note: Chris started pursuing this long before Theresa May's recent comments on the need for reform. We note also the persuasive support of two well-regarded names in this field: Neil Woodford and Lord (Paul) Myners.
In his paper Chris calls for the introduction of a Swedish-style "shareholder committee" of the five biggest shareholders in a company, which would provide more effective governance in particular with regard to executive pay. This measure would help tackle the problem of "ownerless corporations". He also supports the call for binding annual votes on executive pay, and the introduction of the mandatory publication of pay ratios. He recognises the advantage in including the employees' point of view in discussions over pay at the top.
We hope you enjoy reading Chris's paper.*
* PLEASE NOTE
Sky Plc has asked us to point out the following concerning fig 1 on page 10 of the report:
"The data for Sky shows a one year figure within a scheme that pays out biannually, meaning one year 'spikes' and the next year reduces significantly. Therefore, over Sky's two year payment system, Sky would not appear in this grid and would fall below the theoretical maxima."
Since 1 January 2019 the average FTSE 100 CEO has earned:
Income inequality in the UK
Wealth inequality in the UK
- Top Dogs and Fatcats: the debate on high pay
High Pay Centre essay featured in collection published by the Institute of Economic Affairs think tank
- HPC in the media: the myth of shareholder stewardship
Our analysis of shareholder voting patterns makes the case against a corporate governance system policed by dis-engaged investors
- The myth of shareholder stewardship
new HPC analysis shows investors are not interested in tackling inequality and excessive executive pay