Cash bonuses for top directors of British companies have stayed resiliently high despite the rigours of the downturn.
A report by remuneration consultancy Hewitt New Bridge Street shows that blue-chip businesses across a range of sectors _ not just banks _ paid executive directors comfortably over half the maximum bonus available last year.
At a time when managements are telling workers they are lucky to be in employment at all, and often asking them to accept pay freezes and cuts (or in British Airways’s case, sometimes work for nothing), this is really rich (pun intended).
It will annoy both employees on the lower, parched slopes and shareholders in companies who have seen reduced company earnings in the recession batter share prices and cut dividends.
The stock answer from business is that, even in a recession, it must have bonuses to attract, retain and motivate (you know the rest...).
This is beginning to sound a bit of a tired excuse from the cavalier saddle in these difficult times for the toiling infantry.
Presumably, the unspoke addendum is that workers down the food chain do not need to be attracted, retained and motivated.
I think in this recession many ordinary workers can accept pay freezes, even cuts at times, for instance in our savaged steel industry, and certainly do not expect bonuses.
But when they see these bonuses at boardroom and senior management below-boardroom level being impervious to the economic conditions people are bound to feel there is an ethical apartheid going on here.
The latest survey says that one in five FTSE 100-quoted businesses paid out an astonishing 90 per cent of maximum possible bonuses last year.
That’s pretty near insulting when about the same percentage of FTSE 100 companies suffered share price falls. So much for aligning directors’ remuneration and bonuses with that of investors.
It also shows that bankers are just the most obvious Aunt Sallys for criticism on bonuses, acting as a lightning rod for public disatisfaction and covering up the fact that many executives in other industries are also raking it in during the worst recession since the Second World War.
I doubt such largesse was around after the Wall Street crash. But, on current evidence, boardrooms are responding with almost a shrug of the shoulders and ‘That’s life’ attitude.
