Directors’ pay sparks row

Press, 29 July 1989, Page 10

Directors’ pay sparks row

NZPA-Reuter London A series of big salary increases for Britain’s captains of industry has focused attention on whether some of them are worth it.

“We seek a high-pay, high-performance economy,” said John Banham, director-general of the Confederation of British Industry, fiercely justifying the rises.

But this week even the Prime Minister, Margaret Thatcher, a torch-bearer of Western capitalism, expressed disapproval. Her aides said the rises,

some of them more than 200 per cent, come at a time when the Government is encouraging more modest shop-floor wage settlements to try to fight inflation.

British Rail, for example, is currently offering an 8.8 per cent pay rise to its employees which one union has rejected. Executives, however, point to their counterparts in the United States where top pay is much higher and argue that it is vital to keep talented directors from being

lured across the Atlantic.’

Headhunters say competition for corporate high-flyers will get even more intense after the European Community removes internal barriers to create a single market

Lord King, the dynamic chairman of British Airways and a Thatcher acolyte, is at the centre of the growing pay row. Lord King, who turned BA from a loss-maker into one .of the world’s most profitable airlines, recently took a 116 per cent increase, bringing his salary to £386,000