Greater scrutiny needed on top private sector pay
14 Jan 2008
Congress General Secretary David Begg has criticised the secretive manner in which the pay and perks of top private sector bosses are decided.
Speaking in Cork today (14 January 2008) Mr Begg said that in the current row over pay levels in the public and private sector "there has been surprisingly little scrutiny of how salaries and perks are decided for top people in the private sector.
The reality is that these decisions are made by board remuneration committees populated by a small cohort of people who pop up in other boards across the economy. There is little or no shareholder policing of this practice.
Commenting on the growing pay gap that has been highlighted by the recent publication of the benchmarking report, Mr Begg said it was obvious there was "an increasing divergence in remuneration between the top and middle to lower income earners in the private sector and this has now been reflected on to the public service.
Indeed, recently published figures show that private sector wage disparity has grown dramatically in the US. In 1970, a chief executive stood to earn some 25 times the average wage today that figure stands at 360 times the average wage. The same trend is evident across the global economy.
"This is not a path we should be going down, the enrichment of the few at the expense of the many. Ultimately it destroys social cohesion and rots the very fabric of society", Mr Begg said.
A further worrying example of this trend, he said, was the "calculated abandonment of proper pension provision in the private sector. The percentage of Defined Benefit Schemes has reduced from 67 per cent to 37 per cent with the result that there has been a huge transfer of risk from employers to workers.
Mr Begg said any upcoming pay talks would have to address these key issues in a coherent, focussed and strategic fashion.
Ends