City & Business: Two-faced perkiness
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Your support makes all the difference.Laugh of the week came from the Confederation of British Industry, which is urging employers to crack down on the myriad perks paid to executives.
The organisation's hypocrisy on pay is always worth a giggle. At the CBI conference two years ago, the then CBI president, Sir Michael Angus, who'd just received a 17 1/2 per cent pay rise to pounds 689,000 as chairman of Unilever, berated MPs for demanding 4 per cent.
Senior executives are the last people likely to control perks, just as they have failed to stamp out long-term rolling contracts - which are the holy grail for incompetent directors because they ensure whopping pay-offs. A study of 954 directors by the consulting actuaries Bacon & Woodrow last week found that the proportion on three-year rollers had actually increased from 33 per cent to 39 per cent.
There is no sign of pay-offs abating. Tom Buffett, who was ousted from the alarms company Automated Security Holdings last week, stands to collect up to pounds 1.5m, thanks to his cast-iron five- year roller.
Perks at the most senior level are rampant, as the details of the Bacon & Woodrow survey show. Take one category - the chief executives of companies turning over more than pounds 1.25bn. Their base salaries average pounds 317,000, but that is just the start. The vast majority receive huge pension contributions, averaging pounds 89,000. Then there is the pounds 84,000 bonus, the company car allowance of pounds 17,000 plus pounds 1,500 worth of fuel, pounds 5,000 worth of permanent health insurance, pounds 10,000 worth of life assurance. The total package is valued at pounds 533,000.
The chances of executives voluntarily cancelling these goodies is zero.
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