FACT S E R V I C E
149 Executive pay goes on rising in the recession
150 Age-friendly employers are recognised
Friends of the Tories and their spending cuts
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Executive pay goes on
rising in the recession
Pay freezes. Unpaid leave. Mass redundancies.
For many workers, the past year has been one of
insecurity. And for those lucky enough to hang on
to their jobs in the recession, wage increases are
getting stingier: average earnings in the private
sector were rising at 3.1% year-on-year at the end
of 2008,and the rate slipped to 2.1% (including
bonuses) by this summer.
But the recession has passed by the door of the
boardroom of the UK’s top 100 companies, according
to the Guardian’s annual survey of executive pay.
Executives at Britain’s top companies saw their
basic salaries leap 10% last year, despite the on-
set of the worst global recession in decades. And
the pay and benefits bill for the full- and part-time
directors of the FTSE 100, the premier league of
British business, came to more than £1 billion.
The Guardian data also shows that a clique of elite
bosses at the helm of multinational corporations
are seeing their overall pay packets soar ever
higher. The 10 most highly paid executives earned
a combined £170 million last year — up from £140
million in 2007. Five years ago, the top 10 banked
some £70 million.
LABOUR RESEARCH DEPARTMENT
Published weekly by LRD Publications Ltd, 78 Blackfriars Road, London SE1 8HF. 020 7928 3649 www.lrd.org.uk
151 Who is backing the Taxpayers' Alliance?
Teachers' campaign targets BNP governors
152 Helpline is launched on pay and work rights
Weekly earnings data barely rise in July
Volume 71, Issue 38, 24 September 2009
Brendan Barber, general secretary of the TUC, said:
“The recession has done nothing to stop the gap
between top directors and the rest of their staff
getting wider every year.
“It is even more offensive when the Institute of
Directors has called for spending cuts that would
hit pensioners, the poor and low-paid public sector
staff. We’ve already had the 1980s-style recession, it
looks depressingly like we are going back to 1980s
greed-is-good politics, too.”
The highest paid boss last year was Bart Becht,
the chief executive of household goods group
Reckitt Benckiser, whose brands include Harpic,
Veet and Strepsils. He was rewarded with £36.8
million in pay, bonuses, perks and share incentive
schemes — that was almost £8 million more than
Aidan Heavey of exploration company Tullow Oil
in second place. Chip Goodyear of mining multi-
national BHP Billiton ranked third on £23.82 million.
Goodyear retired last year and cashed in his long-
term incentives and share options.
No woman appears in the top 20 listed over. The top
earning woman was Cynthia Carroll, chief execu-
tive of mining multinational Anglo American, who
received a total of £3.98 million. She beat Linda
Cook of oil giant Royal Dutch Shell into second
place with £3.88 million. Third spot went to Marjorie
Scardino, chief executive of media group Pearson,
who received £3.79 million.
150 Fact Service Volume 71 Issue 38

Top 20 highest paid executives 2008 on the need to retain mature and experienced
Name Company Total salary employees to keep a competitive edge in the mar-
£m ketplace of the 21st century.
Bart Becht Reckitt Benckiser 36.76
Aidan Heavey Tullow Oil 28.84 He added: “It appears the recession has deepened
Chip Goodyear BHP Billiton 23.82 the impact of damaging stereotypes. Fortunately,
Sir Martin Sorrell WPP 19.71 our winners today have shown us a better way. In-
Bob Diamond Barclays 17.48
Stanley Fink Man Group 15.38 stead of being trapped in narrow thinking, they’ve
Trevor Reid Xstrata 15.34 given us a window and a way to success. They offer
Arun Sarin Vodafone 13.75 a roadmap to a modern workplace that is fair and
Santiago Zaldumbide Xstrata 12.56
Graham Martin Tullow Oil 11.44
flexible, a workplace that recognises the contribu-
John Pluthero Cable & Wireless 10.63 tion of experienced workers."
Jean-Pierre Garnier GlaxoSmithKline 10.33
Frank Chapman BG Group 10.10
Paul Pindar Capita 9.86
Chris Ball, chief executive of the UK not-for profit
Matthew O’Donoghue Tullow Oil 9.21 organization The Age and Employment Network,
Sir Terry Leahy Tesco 9.11 said that there are many companies that are not
Mike Turner BAE Systems 7.22 currently addressing the challenges of workforce
Brad Mills Lonmin 7.20
Manny Fontenla-Novoa Thomas Cook 7.04
ageing, but there are others which have discovered
Jeroen van der Veer Royal Dutch Shell 7.02 a real business advantage in doing so.
www.guardian.co.uk/news/datablog/2009/sep/14/executive-pay-bonuses-pay
www.guardian.co.uk/business/series/guardian-executive-pay-survey-2009
“The challenge of helping workers age success-
fully is being taken up by leading edge companies
and individuals who see the potential gains. They

Age-friendly employers have responded with innovative spirit and in some

are recognised
Three British companies are amongst the winners
of the prestigious AARP International Innovative
Employer Awards for age-friendly employment
practices this year. The three are telecoms group
BT, utilities group Centrica and insurance group
Domestic and General Services.
The British firms are amongst 10 employers from
four different countries that have been selected
for their ground-breaking workplace policies and
practices. Other firms include employment agency
Adecco Employment Services in Canada, and the
German car group BMW.
The AARP is a US-based, non-profit organisation
representing nearly 40 million older Americans.
Its International Innovative Awards programme is
designed to promote imaginative human resource
and workforce practices around the world.
Key areas for consideration include: recruiting
practices; opportunities for training, education
and career development; workplace accommo-
dation; alternative work options, such as flexible
scheduling, job sharing and phased retirement;
employee health and retirement benefits and
retiree work opportunities.
Thomas C Nelson, the AARP’s chief operating of-
ficer, said that the awards focused global attention
cases, real panache. We strongly encourage more
UK employers to step forward, apply for the 2010
awards, and be recognised for their industry-lead-
ing employment policies,” Ball said.
http://taen.org.uk/media/view/62
Friends of the Tories
and their spending cuts
Two organisations, whose members are natural
Conservatives, have called for £50 billion in cuts in
its public spending plan.
The Taxpayers’ Alliance pressure group and the
business lobbyists the Institute of Directors propose
abolishing Surestart and child benefit, and imposing
a one-year freeze on the basic state pension and on
all public-sector pay except for the army.
The joint report proposes £42.5 billion of annual
savings for 2010-11 and £7.5 billion savings in the
years thereafter.
“Unless fiscal tightening efforts are sufficiently
credible, interest rates on government debt could
increase to unsustainable levels and sterling
could undergo further dramatic falls,” it says, also
claiming that Britain will have a structural deficit
of between 10% and 12% of GDP in the next finan-
cial year. The authors say the government cannot
afford simply to wait for public service reforms to
Volume 71 Issue 38 Fact Service 151

increase efficiency; the deficit has to be cut now Individuals Conservative

donations (£) 1
through immediate spending reductions.
Stuart Wheeler 3,933,300
Sir Tom Cowie 661,250
A freeze in the basic state pension would save Lord Kalms 557,745
£1.44 billion, while these two organisations of the David Ord 196,224
rich think the free TV licence for pensioners aged Sir Mark Weinberg 158,750
Patrick Evershed 139,594
over 75 can go to save £564 million a year. They are Lord Chadlington 48,823
also targeting the free bus pass for the elderly and Gerald Wakefield 39,500
disabled leaving it only for “those who genuinely Grahame Berkeley 35,000
John Leavesley 31,000
need it” to make an annual saving of £438 million. Michael Heller 30,000
Sir John Craven 26,084
A one-year freeze in the pay of all public-sector John Hoerner 22,524
Damon de Laszlo 17,001
workers would save £6.2 billion says the report. Gerald Kaye 15,000
Other suggested cuts include a 10% drop in non- Kambiz “Kim” Jaberi 14,850
frontline staff in health and schools at a saving of Gary Mond 10,250
Rocco Forte 10,000
£921 million and a 10% slice from the civil service John (Lord) Taylor 8,600
worth £1.2 billion. Sir Michael Cobham 6,500
Malcolm McAlpine 4,000
AR Tanner 3,250
Savings of £8.4 billion could come from taking Margot James 2,500
welfare from the middle class, including abolish- Lord Vinson 2,000
ing child benefit.
Companies Industry
www.guardian.co.uk/politics/2009/sep/10/child-benefit-tory-spending-cuts Flowidea finance 1,052,683
www.taxpayersalliance.com/50bil.pdf JCB Research/JC Bamford construction equipment 702,509
David Ord docks 140,000
Slough Estates property 106,000
Caledonia Investments finance 98,000
Who is backing the Harris & Sheldon
Berkeley Burke
engineering
finance
91,000
53,863

Taxpayers’ Alliance? Air Foyle

Sir Robert McAlpine
Helical Bar
transport
construction
property
26,500
22,500
22,000
Lowe & Fletcher engineering 20,200
Tom Powdrill, an ex-TUC official now working for a Huntsworth communications 12,100
corporate governance consultancy, has researched Sir Rocco Forte Ltd hotels 10,000
the backers of the pressure group the Taxpayers’ Dunalistair Estates farming 6,917
Leavesley Group/JT Leavesley vehicle dealers 5,750
Alliance for his blog. Midland Chilled Foods food 3,000
1
Total cash donations from February 2001
He has cross-referenced them with the register of
political donors maintained by the watchdog the http://labourandcapital.blogspot.com/2009_08_01_archive.html
Electoral Commission. And with calls for cuts in
public spending (see the story above) it is no sur-
prise that they back the Conservative Party with
big cheques. The list includes individuals listed
Teachers' campaign
by the Taxpayers' Alliance as supporters and also
companies they are connected with.
targets BNP governors
The NASUWT teachers’ union has extended its
But some alliance supporters have transferred their campaign to prevent members of the British Na-
affections to United Kingdom Independence Party tional Party (BNP) from working as teachers to
(UKIP). Harris and Sheldon has recently given UKIP include banning BNP members from serving on
£5,000 and Stuart Wheeler has also moved into the governing bodies.
UKIP camp to the tune of £128,000 this year.
The union has also taken legal advice and is poised
Other alliance supporters with UKIP links include to seek a judicial review under the provisions of the
economist Tim Congdon, founder of economic Race Relations Act 1976 regarding the role of any
forecasting group Lombard Street Research, who BNP councillor serving on a governing body.
has since left the party and reportedly rejoined the
Tories. And Lord Pearson of Rannoch is favourite General secretary Chris Keates has written to all
to become UKIP leader now that Nigel Farage has lead members for local authority children’s serv-
announced that he is standing down. ices reminding them of their duties under the
152
race legislation, urging them to ensure that they
are compliant with its provisions and to take steps
to protect children, young people and staff from
exposure to the BNP’s vile agenda.
Letters have also been written to the Local Govern-
ment Association, the National Governors’ Associa-
tion and to the schools’ minister, Vernon Coaker,
requesting them to issue appropriate advice to
their constituent bodies.
“The BNP is cynically using and abusing the local
and national democratic process in an attempt to
promote and legitimise its vile agenda,” Keates
said. “The veil of respectability the BNP seeks by
fielding candidates in national and local elections
should not be allowed to distract people from the
danger this organisation poses."
The NASUWT has already been alerted to one case
in the East Midlands where a BNP councillor may
be set to become a vice-chair of governors.
“The NASUWT has taken legal advice and it is
clear that local authorities and school governing
bodies are potentially vulnerable to judicial review
if they have members of the BNP on their governing
bodies,” Keates said.
www.nasuwt.org.uk/Whatsnew/NASUWTNews/PressReleases/NASUWTCallsForBa-
nOnBNPServingOnGoverningBodiesAndWarnsOfLegalAction/NASUWT_004916
Helpline is launched on
pay and work rights
The business, innovation and skills department
has set up a single helpline to give employees and
employers advice on basic employment rights.
The helpline number is 0800 917 2368.
The Pay and Work Rights Helpline will give advice
on five areas: the national minimum wage, the agri-
cultural minimum wage, the working time directive,
employment agency standards and the licensing
of gangmasters.
The helpline is aimed at vulnerable workers, but
can also be used by employers who need clarifica-
tion on employment rights.
Business minister Pat McFadden said: “By con-
solidating the current complex system of differ-
ent helplines for different issues into one single
number we are making it easier for workers to
report abuses and for government to respond. We
Fact Service Volume 71 Issue 38
are determined that the recession does not be-
come an excuse to deny people their basic rights
at work.”
TUC general secretary Brendan Barber, welcoming
the launch, said: “This vital new helpline will ensure
workers at risk of mistreatment by their employers
not only have a phone number that they can call
to find out about their rights, but they can also ask
for help in enforcing these rights.
“Everyone has the right to work in a safe and har-
monious workplace and the easiest way to secure
a better deal at work is joining a union. Union
members are better paid, less likely to have an
accident at work and are more likely to be offered
the chance to develop professionally.”
www.bis.gov.uk/new-pay-and-work-rights-helpline
www.tuc.org.uk/newsroom/tuc-16997-f0.cfm
Weekly earnings data
barely move in July
Average weekly earnings for the whole economy
showed a minute 0.2% increase in July, according
to the latest figures from the Office for National
Statistics (ONS).
Public sector earnings showed the biggest sectoral
annual rise at 3.2%.
Meanwhile, the private sector saw earnings fall
year-on-year, mainly as a result of a fall in private
services and manufacturing earnings.
Estimates on a sector basis are shown below. The
figures are still an “experimental statistic”, the
ONS says. Unlike the uprated occupational figures
from the Annual Survey of Hours and Earnings,
produced monthly along with the average earnings
index figures, the figures cover part-time as well
as full-time workers.
Average weekly earnings — July 2009
£ a week % rise
Whole economy 438.70 0.2
Private sector 434.10 -0.7
Public sector 454.70 3.2
Manufacturing 498.20 -0.4
Services 424.10 0.3
Private services 414.10 -0.9
Production 517.40 0.2
www.statistics.gov.uk/StatBase/Product.asp?vlnk=14015
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