Fat cats back on the news agenda

17th Aug 2009 14:06

Compass, a left wing pressure group, has called for the creation by the government of a High Pay Commission to launch 'a wide-ranging review' of the pay of top bosses and high earners operating in the world of finance.'Remuneration and performance pay cycles are too short; rewards for failure are too great, to the detriment of the long-term future of these companies and the wider economy. The government must now take decisive action on excessive pay at the top when it has had such a damaging and corrosive effect on the real economy and wider society,' Compass said in a letter. A number of politicians, professors and journalists put their name to the letter, as did senior members of charity organisations. Those lending their support to the idea of a High Pay Commission included Dr. Vince Cable, Liberal Democrat Treasury spokesman; Labour MPs Frank Field and Dr. Jon Cruddas; Brendan Barber, general secretary of the Trades Union Congress and Peter Tatchell, the human rights campaigner.The letter comes a day after Chancellor of the Exchequer Alistair Darling indicated that he is ready to introduce legislation to ensure that executive bonuses are not dished out to employees whose activities have put banks at risk.In an interview with the Sunday Times, Darling said: 'If we need to change the law and toughen things up, we can do that. I'm quite clear that some of the problems we have today were caused by the fact that some traders were incentivised to take risks which neither they nor their bosses fully understood.'The divisive topic of executive pay has returned to the top of the news agenda this week on reports that Barclays Capital is offering up to £30m in bonuses to lure five bankers away from JP Morgan.Meanwhile, on Monday, The Times newspaper claimed that Antony Jenkins, the chief executive of Barclaycard, was paid several million pounds in compensation after a promised promotion did not take place. Barclays refused to comment on the story.With all this talk of neutering the fat cats it would seem that Sir Fred Goodwin, the former boss of Royal Bank of Scotland (RBS), has picked an unpropitious time to end his five-month exile on the French Riviera. Goodwin returned to his Edinburgh mansion last Friday amid reports that he has hired an image consultant to try and repair his damaged reputation.Goodwin became a public hate figure after it emerged that he would receive an annual pension payment of more than £703,000 as a result of a decision to allow him to retire before he got the sack for leading RBS to the brink of bankruptcy. The pension pay-out has now been reduced to £342,000 a year after Goodwin agreed to revisions to his pension deal.