02 October 1998
No end to fat-cat pay offs
Not only are private companies failing to heed government pleas to show more restraint when it comes to executive pay, but the trend for large pay-offs to departing directors is continuing, the latest Labour Research annual survey of golden handshakes reveals.
A total of 106 company directors pocketed pay-offs or "compensation for loss of office" of ?100,000 or more in the last financial year with six getting over ?1 million apiece. These include the largest pay-off ever made by a UK company - a staggering ?12.42 million.
The October issue of Labour Research magazine published today reveals that music group EMI paid Jim Fifield ?6.27 million for the early termination of his contract along with a retirement contribution of ?6.15 million. Fifield resigned from the EMI board and as president and chief executive officer of its US subsidiary EMI music, in April this year after 10 years with the group.
Fifield's pay off is around four times the previous highest figure traced by Labour Research - the ?3 million plus golden handshake paid to John Cahill, the former British Aerospace chief executive, when he left the group in 1993.
The 106 golden handshakes were worth a total of ?49,066,616 producing an average pay-off of ?462,893. Stripping out Fifield's whopping payment reduces the average to ?349,015 but even this figure represents a 6.5% increase on last year's average (?327,771).
Executive pay-offs are linked to levels of executive pay and the pay boom of recent years has inevitably has a knock-on effect on the size of golden handshakes. Last month Labour Research revealed that top executives earning ?500,000 or more in stock exchange companies enjoyed average pay rises of 14.6% (and 16% the previous year).
Notes to editorsA full list of the 106 directors receiving golden handshakes of ?100,000 or more is published in the October 1998 issue of Labour Research. The price of a single copy is ?2.70 (?3 including postage).
The Labour Research Department is an independent trade union and labour movement organisation founded 86 years ago. More than 2,000 trade union organisations, including 54 national unions, representing 99% of total TUC membership are affiliated.
For more details contact Neal Moister on 0171 902 9218.