Stripping Fred Goodwin of his peerage is no substitute for tackling excessive executive pay and reforming the financial sector

The TUC Touchstone blog is well worth a visit - below we reprint a blog from Janet Williamson looking at executive pay. For the full blog click on Janet's name at the end of the paragraph to go to Touchstone.

Yesterday’s papers were full of the news that Fred Goodwin has been stripped of his knighthood awarded in 2004 for “services to banking”. However pleasing this may be, it is no substitute for taking effective action to tackle excessive executive pay and reform the financial sector so that it serves the needs of the real economy rather than itself and its top earners. The key issues here are not the bonuses or peerages of a few individuals, however much these might rankle; tackle these in isolation, and they will simply be replaced by the next ‘pariah’. What we need is wholesale reform of the system of setting executive pay, to bring an end to directors’ remuneration rising year upon year in relation to the pay of ordinary workers within the same companies and across the wider economy. This is currently happening throughout the corporate sector as a whole, and not just at RBS

Janet Williamson

Government has shied away from the big decisions needed to reform top pay

Brendan Barber

Commenting today (Monday) on the government's proposals to reform executive pay, TUC General Secretary Brendan Barber said:

"Through its many consultations and speeches, the government has made a compelling case for radical reform of executive pay. It's very disappointing then to see that ministers have spectacularly failed to make any significant changes to the status quo.
"Whilst the Business Secretary has announced a few welcome tinkers to the current boardroom pay regime, he has shied away from the big decisions on all of the major proposed reforms, from worker representation to company pay ratios and open advertising for posts on remuneration committees.
"Over-paid and under-performing directors concerned about greater public scrutiny of their pay and bonus arrangements can rest easy tonight.
"Any hopes of reversing the damaging and growing pay divide between top executives and the rest of their workforce have faded after today's announcement."