Interesting proposal on Executive Pay

High executive pay 'corrosive' to the UK economy, report warns | Business | The Guardian: "Government action to curb boardroom pay becomes more likely as an influential group with the ear of the business secretary, Vince Cable, publishes proposals to reduce the pay gap.

Warning high pay is "corrosive" to the UK economy, the High Pay Commission calls for greater transparency in the setting of executive pay and says employees should sit on remuneration committees. Its recommendations come in the most comprehensive report yet on the need for action on top salaries.

The report shows executive pay has risen sharply – the pay of the head of Barclays is up nearly 5,000% in 30 years – while average wages have increased just threefold.

The commission was set up by the leftwing pressure group Compass and backed by money from Joseph Rowntree Charitable Trust. A government source said on Monday, however, that the work was being taken seriously."

The commission sets out 12 recommendations to tackle high pay. The main reforms include:

• Greater transparency in the calculation of executive pay to end the "closed shop" on pay decisions. At present, many people do not understand until it is too late how a vast salary – often composed of as many as seven different elements – is worked out.

• Putting employees on remuneration committees, a move included in the government's own consultation remit.

• Publishing the top 10 executive pay packages outside the boardroom.

• Forcing companies to publish a pay ratio between the highest paid executive and the company median.

• Requiring companies to reveal total pay earned by the boardroom members.

• Establishing a new national body to monitor high pay.