The Pension Board of the Church of England says the executive pay system has been “broken” because it has challenged more companies to ease the pain of rising inflation by promising workers living wages.
The day the retailer Next approved a 50% pay rise for its chief executive, Adam Matthews, the church’s chief responsible investment officer, cited the example of “extra pay” in large companies in a post on LinkedIn.
On Thursday, Next’s shareholders backed the company’s decision to reward Simon Wolfson with বছর 4.4m this year, despite opposition from some investors concerned about the disparity between the highest level, executive and larger workforce since 2015.
Matthews, who manages the 3 billion investment, voted against raising his shares. Explaining the decision, he wrote: “We can vote on the radio and vote against, but we need to understand that our executive pay system is not working.
“This is especially serious at a time when many of these companies are struggling with the rising cost of living. At consumer-oriented companies like Next, you have a huge increase in executive pay where the workforce is not recognized as a living wage.”
A spokesman for NEXT said: “In light of the challenges facing the retail sector, NEXT does not expect national wages to rise above wages because it prioritizes job security.”
Companies recognized as living wage employers are committed to paying a rate based on the cost of living for all their employees, which is £ 9.90 per hour across the UK and £ 11.05 per hour in London.
Mathews said he would invite chairs of the board and chairs of the remuneration committee and discuss the reform in meetings with other fund managers.
He added: “We are facing a social crisis and more than three-quarters of your churches in the UK are involved in supporting food banks that are not only providing food to the unemployed but cannot meet the needs of those who are working.” So as a pension fund we will call a meeting of the property owners, with the original fund managers to look into this broken system which is making it extra capable. “
His comments on Wednesday followed a warning from Martin Lewis, founder of consumer consulting site Money Saving Expert, that financial frustration could lead to “civic instability”.
Families battling rising food and energy bills have been hit even harder by rising fuel prices for the second time in October this year.
“The mood of the people is desperate, it is angry and we can move on. If these bills come to £ 2,600 in mid-winter in October, I am concerned about civic unrest.” Peston program.
The Institutional Voting Information Service (IVIS), which is part of the Investment Association and advises investors on corporate governance, has issued a “red top” warning in its next annual remuneration report, advising shareholders to vote against it.
Despite opposition, only 7.5% of shareholders challenged Wolfson’s plan to give him an annual bonus of 100% of his basic salary and two share bonuses based on long-term performance.
Employees of Share Action and Labor Behind the Label, who attended Next’s AGM in Leicester, the UK garment industry center, asked company executives why Next was not paid a living wage to garment factory workers.
They said Wolfson listened intently, but did not promise change.
Other companies, including Wagamama’s owner, the restaurant group, have also come under fire in recent weeks over executive bonuses. The group – which owns Frankie & Benny and the Chikuito chain – paid its chief executive, Andy Hornby, বছর 1.2 million last year, up from £ 518,000 a year earlier.
Tesco, meanwhile, was criticized last year for paying its chief executive £ 4.75m, the highest annual bonus paid by a supermarket since 2016, at a time when households are suffering due to rising food inflation.
Nonetheless, Mathews wrote that there was seldom widespread response from investors: “There are occasional revolts by shareholders, but then the focus shifts and we all waste our time trying to understand the complex justification for extra pay.”