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LABOUR MP Michael Meacher made a passionate Commons call yesterday for legal limits on bumper executive pay “that has nothing to do with performance.”
The £83,000 average weekly wage of a FTSE 100 director is now 175 times higher than the £477 in wider society, Mr Meacher warned.
“These turbo-charged salaries have almost nothing to do with performance and everything to do with CEOs keeping up with each other in the status race,” he told MPs.
“Rather as in the end of the Victorian period, which we’re getting closer to now, the very rich constantly demand yet more wealth to show it off in order to demonstrate where they stand in the pecking order.”
Mr Meacher demanded that a legal limit of 50 times average earnings should be fixed by the state — a rate that would still allow execs to take home more than £1.25 million a year.
And he highlighted plummeting trade union coverage after years of legal constraints as one of the reasons for the massive gap between the rich and the rest of us.
The Oldham West MP’s intervention came a day after formerly state-owned oil and gas firm BG Group was attacked for offering a £25 million package to its would-be boss.
Mr Meacher warned: “Inequality fosters fear, creates too much demand for credit to compensate for squeezed living standards, drives asset price bubbles and catalyses financial instability.”
The most successful economies all had a pay ratio of 50 to one or less, he noted.