PCS: Hutton pay formula would make private sector workers millionaires
Hutton’s pay formula would make private sector workers millionaires
If the heads of the big outsourcing companies were on just 20 times more than the lowest paid, as expected to be proposed as part of a review of public sector pay, all staff in at least one organisation would become millionaires in two years, the Public and Commercial Services union says.
While the levels of pay at the top of public sector organisations has been heavily criticised by the government, the real scandal is the salaries of chief executives of the main private companies who receive billions of pounds of taxpayers’ money.
A snapshot of just four of them, using publicly available annual accounts, shows chief executives on more than £1 million in basic pay, bonuses and other benefits – excluding pensions.
The former boss of Hewlett Packard Mark Hurd, who resigned last year, received almost £15 million for 2010. The package was boosted by a £76 million pay-off, but in 2009 and 2008 he took home around £18 million and more than £26 million respectively.
Will Hutton is expected to recommend tomorrow (15 Mar) that no one in a public sector organisation should be paid 20 times more than the lowest paid member of staff. This will have little or no effect on low and unequal pay in the civil service, as this is already the case. But if it was applied to Hewlett Packard all staff would be millionaires in just two years.
Instead, some workers in many of these organisations – whose bosses have made no secret of their eager anticipation of increased privatisation – are paid just above minimum wage, with staff in Capita on less in a year than the chief executive Paul Pindar receives in a week.
Mr Pindar made the mistake of pointing this out to PCS representatives who were leafleting about low pay at Capita outside the company’s headquarters in November.
High executive pay, and the extent of privatisation now and in the future, is the focus of a Channel 4 Dispatches programme due to be broadcast this evening.
PCs general secretary Mark Serwotka said: “While the government lays into high pay in the public sector, the scandal of executives in private companies creaming millions and millions of pounds of taxpayers’ money is going on right under our noses.
“While jobs, pay, pensions and public services are all being cut, these company directors are laughing all the way to the bank with our money.”
ENDS
Notes
– Capita, chief executive, Paul Pindar * £1,618,218
This was total remuneration for 2009, excluding pension, which included salary and fees (£375,000), benefits (£1,260), bonus (£393,750) and gain on exercise of options (£833,033)
Capita’s 2009 annual report says 50% of the company’s turnover of
£2.68 billion * on which it made an operating profit of £357.7m (up 11% on the previous year) * was from government contracts, and adds that the potential UK market for outsourcing is £94.2 billion a year.
– G4S, chief executive, Nicholas Buckles * £1,656,251
This included basic salary (£761,400), benefits excluding pension contribution (£49,088) and bonus (£845,763). It does not include share options.
The chief executive states in the company’s annual report: “We believe that pressure on public sector spending will further drive the need for governments to outsource specific areas to the private sector which is an opportunity for us.”
– Hewlett Packard, chief executive, Mark Hurd * $23,863,744 (£14,842,760 at today’s exchange rate)
This was Mr Hurd’s total package for 2010, the year in which he resigned, and included basic salary of $1,121,944 (£697,826), stock awards of $9,883,455 (£6,147,307) and a $12,224,693 (£7,603,509) severance payment.
In 2009, Mr Hurd was paid a total of $29,465,175 (£18,326,735) and in
2008 he received $42,525,170 (£26,449,784)
– Serco, chief executive, Christopher Hyman * £1,578,662
This was Mr Hyman’s basic salary
(£645,000), bonus (£870,750) and
non-cash benefits (£62,932) for 2009. It does not include pension and other incentives.
– For information and interview requests contact PCS national press officer Richard Simcox on 020 7801 2747 or 07833 978216
– The Public and Commercial Services union represents civil and public servants in central government. It has more than 300,000 members in over 200 departments and agencies, and in parts of government transferred to the private sector. PCS is the UK’s sixth largest union and is affiliated to the TUC. The general secretary is Mark Serwotka and the president is Janice Godrich
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