Former Marks & Spencer boss Sir Stuart Rose has called for a review into the widening gap between executive pay and staff wages.
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He told The Telegraph Hay Festival that it was time to debate the issue. “There has to be a variation between what you earn on the shop floor and what the chief executive earns. The question is, by what quantum? One hundred times? One thousand? Two thousand?
“There’s no doubt about it, we have to accept that over the last year or three the division between the lowest paid and the highest paid has got wider, so that does need looking at.”
When asked if he supported the Hutton Review of Fair Pay, he said: “I’m sympathetic to having a good look at remuneration… if you look at it on a holistic basis, there is room for us to have a solid date.
“The biggest rule that I think people should set themselves is: no pay for failure. That’s what people really, really hate. It is a live topic of debate and it’s one that won’t go away.”
Rose – who was paid £4.3m in cash, bonus and shares over the year to April 2010 at Marks & Spencer – said: “There should be incentive schemes for companies which should be set up on a long-term basis, not a short term basis.
“As a chief executive of a business, if you want to enhance your profits in any one year it’s quite easy to do. What you need to say to executives is, ‘You’re in it for the long term. If the company does well on a five or 10-year basis, you can do well and all the staff do well’.”
However, former trade minister Digby Jones questioned how the cap on directors’ pay recommended by the Hutton review would work in practice.
Lord Jones said: “If a check-out girl at Tesco earns £20,000 a year, which is five grand under the national average wage, and the chief executive of Tesco, I have no idea but let’s say he’s on £1.5m a year – if you’re going to say that differential is too great, can you tell me what is should be? It’s a very difficult thing to determine at what point it’s too much.”