Socialist Worker

Fat cat pay soaring away

Issue No. 1812

PUBLIC SECTOR workers on poverty pay are told that a 3 percent increase is enough. But fat cat pay is going through the roof. The number of executives grabbing over £500,000 a year is now at a record high of 487.

And 123 of these are on £1 million or more. These 487 individuals rake in an obscene £429.8 million between them. Directors earning over £500,000 a year have seen their pay soar by an average of 16.1 percent.

According to Labour Research, this means an 'ever widening gap between boardroom pay and the rest of the workforce'. Most executives get a huge benefits package on top of their salaries. Take, for example, top fat cat Martin Bandier, director at EMI music publishing.

His basic salary rose by 34.2 percent last year, reaching £2,045,400. His annual bonus went up 53.7 percent to £1,636,400. Bandier also owns 155,060 EMI shares that would have provided him with £12,405 in dividends last year. He has a further 365,228 share options. And don't forget his car and private health insurance.

Bosses get a cash injection

A REPORT by the Independent on Sunday describes how 'executive rewards are in danger of spiralling out of control and company directors will soon be paying themselves more than £1 billion a year'. This survey is based on the published accounts of the FTSE 360 index of companies and shows how much a whole board is paid, not just individual fat cats. It shows that total boardroom pay has risen by 105 percent since 1997. It is now £881 million. One of the highest rises in executive pay was at PowderJet, where top bosses' pay rose by 679 percent. PowderJet hit the headlines when it won a contract to produce a controversial smallpox vaccine after its director made a donation to the Labour Party.

Agencies profit, workers suffer

'FLEXIBLE Britain' is New Labour's dream of a society where workers have no rights, no security and no certain future. That world is coming ever closer, according to new reports. More and more bosses are taking advantage of employment agencies. The number of workers placed with employers by agencies increased by 47 percent between 1997 and 2000.

According to the TUC, 18 percent of temporary workers are supplied by agencies, compared to only 7 percent eight years ago. Another survey found 28 percent of workplaces employ agency staff. This is good news for recruitment agency management who charge commissions of between 10 and 25 percent, making huge profits.

Hays Personnel Services, for example, made £124 million last year. The British Nursing Co-operations group made over £15 million. The spread of agency work is bad news for workers. Permanent posts are being replaced by agency contracts involving less rights to paid leave, lower pay and no pension schemes. Simon Jones was killed on his first day as an agency worker on Shoreham docks in 1998.

Blair smiles do not stop crisis

A FLAGSHIP Private Finance Initiative (PFI) hospital was officially opened by Tony Blair last week. But the occasion was spoilt by the hospital's admission that on the very day of the ceremony an important operation was cancelled due to bed shortages. This is just the latest in a long line of problems at the University Hospital in North Durham. The plans for 600 beds were scaled down to 454, causing fears of bed shortages before a single patient had been received. The hospital's own chief executive, Steven Martin, admitted that if the hospital was built again more beds would be needed.

Another new PFI hospital, Hairmyres, outside Glasgow, has been open for just over a year. It has just closed half its theatres to carry out urgently needed repairs.

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Article information

Sat 10 Aug 2002, 00:00 BST
Issue No. 1812
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