Cameron accused of 'diverting attention' by highlighting excessive executive pay

Prime Minister David Cameron's focus on executive pay is an attempt to shift the debate from grim economic predictions in 2012, public affairs operators have said.

David Cameron: focus on executive pay
David Cameron: focus on executive pay

Yesterday Cameron vowed to tackle ‘crony capitalism’ by introducing binding shareholder votes on the pay of top executives.

Top of Cameron’s agenda is tackling bosses receiving huge pay increases despite companies not improving their performance.

Speaking to the BBC,Cameron said: ‘Those big rewards when people fail make people's blood boil and is actually taking money from the owners of the company, the shareholders and everyone with a pension in Britain.’

Fleishman-Hillard head of public affairs Nick Williams accused Cameron of using executive pay to divert attention away from ‘dire economic predictions’ in 2012.

He said: ‘With 2012 starting off with dire economic predictions the Prime Minister is simply using populist measures to divert attention. With a near-total dearth of good news, Number 10 will have to work creatively on developing these schemes.’

Edelman director Dominic Pendry said Cameron was not seeing the bigger picture: ‘The Government continues to poll well on the economy, helped by Labour’s tarnished reputation in this area. However, the key point of weakness is around fairness – are the cuts affecting some, women and the disadvantaged for example, more than others and who will benefit when the economy starts growing again?

‘Strong rhetoric around executive pay will not compensate for real action to create a more fair society.’
Last year the Government was accused of making a series of policy U-turns. Fleishman's Williams warned that Cameron could not ‘water down’ his executive pay proposals after such a public statement on the issue.

‘Number 10 has to have a far tighter grip on initiatives coming out of government, including policy announcements. This is fundamental to the effective operation of government and should have been one of the lessons that Cameron learned from Tony Blair’s successful Number 10 operation.’

Liberal Democrats want boardroom remuneration committees to include people who can restrict company heads from settling one another's pay and creating a ‘crony culture’.

Business secretary Vince Cable wants to see publication of company heads' pay as a single figure – total pay, including salary, long-term share plans, retirement schemes and other perks.

Cable has called for the publication of the difference between chief executives' pay and that of the average worker. He also further asked for details of the proportion of company profits paid to directors.

Cable’s request comes after research from the Institute for Public Policy Research found chief executives in 87 of the FTSE 100 companies took home an average of £5.1m in basic pay, bonuses, share incentives and pension contributions in 2010-11.

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