LONDON — According to recent reports, chief executives of top British companies are now paid 81 times more than the average British worker. The pay gap has nearly doubled in the past decade. There is no justification for this trend.
British companies have not been notably more successful or competitive as a result of the huge sums they've paid to chief executives. In fact, the British and foreign banks that drove up the derivatives' market had to be rescued by huge injections of government funds.
Some chief executives, such as Sir Fred Goodwin of the Royal Bank of Scotland, were paid very large sums even as they oversaw debacles that would have led to bankruptcy if the government had not stepped in. HBOS (Halifax Bank of Scotland) and Northern Rock paid their chief executives huge salaries and, without government intervention, would have gone to the wall.