HM Treasury News Release

135/98                                         11 August 1998
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            BOARDROOM PAY CONTINUES TO CAUSE CONCERN

The total remuneration of major privatised utility company boards
has increased by around 18 per cent over the last year, Treasury
analysis of a Utility Week survey showed today. 

The survey, which showed total utility boardroom remuneration
growth of 15 per cent, shows a rise of  around 18 per cent for
major privatised utility companies. The figures also show some
individual chief executives receiving pay increases of over 40
per cent. 

Chief Secretary Stephen Byers said today:

     "The Government has said time and time again that pay
     responsibility must be shown from the boardroom down to the
     shop floor.

     " People must recognise that today's excessive pay increase
     could be tomorrow's interest rate rise or mortgage
     increase. That is why the Government warned, in response to
     the consultation on the Utility Green Paper, that it would
     consider taking action to increase shareholder control over
     directors' pay unless there is a more positive approach by
     all companies. For the price regulated utilities, we 
     believe that regulators should write an open letter to the
     remuneration committee setting out how well service
     standards have been achieved.

     "Today's figures give cause for concern. Where performance
     has not been outstanding, it should not be rewarded. The
     Government wants to see boardroom pay linked to the
     achievement of rigorous, long-term performance standards.
     Consumers expect and deserve high standards of service, and
     the Government has set out steps to develop a clearer link
     between the setting of boardroom pay and the achievement of
     demanding service standards. There is a particular concern
     where consumers do not have an effective choice of
     supplier. The interests of customers should be set firmly
     on the boardroom agenda; these figures suggest this is not
     the case." 


NOTES TO EDITORS

The Utility Week survey was published on 31 July 1998.  It
examines total board remuneration in the utilities over the last
year. The Treasury figures exclude: Cable and Wireless, CWC,
Energis, Colt, Kingston Communications and Vodaphone.

# = pounds sterling