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GUARDIAN |
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Special report: Executive pay |
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A boss is worth 45 workers
What about the differentials? Day two of the Guardian-Inbucon
executive pay survey Julia Finch, City editor Thursday August 30, 2001 British bosses value their talents and efforts as equal to
more than 45 ordinary workers, according to an analysis of the Guardian-Inbucon executive pay survey. While Japanese bosses rate their efforts and contributions
as equal to that of about 10 fellow workers and Swedish executives get by on
a mere 13 times an average worker in their employ, British executives appear
to regard their input as exceptional. Certainly there is evidence that some UK directors rate
their skills and services very highly and that is comparing only basic salaries,
and not the huge bonuses and share options enjoyed by most chief executives
and executive chairmen. Excluding all such bonuses and share option gains, the
highest paid UK chief executive is Ken Berry at EMI group's record division. According to the last published report and accounts, Mr
Berry's salary was £2,040,800 - some 53 times the average EMI salary of
£38,540. His counterpart at EMI music publishing, Martin Bandier, was paid a
basic wage of £1,530,600, equal to 40 times average group pay. Together the duo singlehandedly account for nearly 1% of
the entire company payroll of 10,000 employees. The most "valuable" chief executives in the
Guardian/Inbucon survey are Rentokil Initial's Sir Clive Thompson and Mike
King, executive vice-chairman of Anglo-American, the mining and De Beers
diamonds group. Low-wage economies Sir Clive, a past president of the CBI, is paid the
equivalent of 114 of his average employees, while Mr King takes home the same
as 101 of his workers - both groups employ vast numbers of employees in low
wage overseas economies. At the other end of the scale BP's Lord Browne and Cable
& Wireless's Graham Wallace are paid the equivalent of just 18 and 16 of
their average employees, respectively. But they are at the head of or
ganisations with highly paid workforces. Their combined 130,000 workers
average more than £47,000 per head. Other highly paid workforces include drugs groups GlaxoSmithkline
and Zeneca, where an average worker's salary is about £35,000. The lowest
paid was Anglo-American, where the average worker earns some £8,000. Tesco chief executive Terry Leahy's talent and
contribution to the supermarket business is valued at the same as 57 ordinary
Tesco workers, whose average salary is about 13,500. Niall Fitzgerald is
worth 61 ordinary Unilever staff. The findings of the Guardian survey were backed up by
another recent survey by Management Today. That report showed that while the UK has the second-best rewarded
chief executives in the world, it also has among the worst-paid manufacturing
workers in the developed world. It showed that while UK chief executives were worth the
same amount as 25 manufacturing employees, German bosses received just 11
times more than their aver age shopfloor workers. French bosses were rated to
be worth the same as 15 manufacturing workers. Only US chief executives were regarded as more valuable
than British bosses - earning 31 times more than an average manufacturing
worker. The widening gap between UK boardroom salaries and the wages
paid to workers is fast turning into a "chasm" according to one of
the UK's leading trade unionists. John Edmonds, general secretary of the GMB union,
yesterday called for directors to exercise restraint and consider the salaries
and wage rises paid to shopfloor workers as they rake in ever-higher pay packages.
He joined forces with other union leaders to condemn many
of the multi-million pound packages revealed in the Guardian's executive pay
survey, and said most were "unjustified and increasingly divisive". |