Privatised utilities awarded directors rises of up to 52%

FRESH political controversy is expected over pay increases of up to 52 per cent awarded to directors of the privatised water, gas and electricity companies. At a time when most of their employees received rises of little more than 2 per cent, the utilities were rewarding their highest- paid executives with salary rises averaging nearly 14 per cent, according to latest company reports.

The water industry came out top with the single highest-paid director in each of the 10 companies getting an average 17 per cent rise in remuneration. That figure was almost nine times the inflation rate and the news yesterday provoked bitter protests from Unison, the biggest union in the utilities.

In the electricity sector, the

highest-paid individuals among the 16 organisations received salary increases averaging 12.7 per cent, with the rises in total remuneration coming out at just over 8 per cent because of lower bonuses.

The biggest rise in bonus was received by the highest-paid director at Northern Electricity. He got 187.5 per cent more, taking his extra payment to pounds 23,000. The average salary for the highest-paid directors in water companies stood at pounds 138,857, while the equivalent in the electricity sector was pounds 194,630. The steep jump in pay came in the financial year to March 1993, at a time when ministers were urging top executives to reward themselves with the same degree of moderation they imposed on their employees.

Senior managers in the utilities would argue that, generally, earnings of board members in the sector are nearly one-fifth below the median earnings of colleagues in equivalent-sized private-sector firms. They would also point out that there was a wide variation in increases, with some top directors seeing their total remuneration drop because of lower bonuses.

The pay of Robert Evans, the chairman of British Gas, fell by 12.8 per cent in the year to last March, although that still put him on pounds 379,484 a year - the highest figure in the utilities. Second and third highest were the chairmen of National Power and PowerGen who earned respectively pounds 340,253, including pounds 64,260 bonus, and pounds 312,802, including pounds 57,200 bonus.

Incomes Data Services, which conducted the research, warns however that there will continue to be further substantial increases in the earnings of utility company directors as they seek to catch up with other parts of the private sector. Of the 38 directors singled out by IDS, seven were paid more than the private sector median.

Alan Jinkinson, general secretary of Unison, which is fighting a public sector pay freeze, denounced the latest increases. 'These people are ripping off the public and showing utter contempt for their employees who are paying the price in job losses. They should lead by example or they could see their own pay rises reflected in our pay claims. So much for John Major's classless society,' he said.

Management Pay Review; Incomes Data Services, 193 St John Street, London EC1V 4LS.