The Work and Pensions select committee is considering to launch an inquiry into executives’ pension payments, after companies came under fire for failing to align these with the rest of their staff.
Independent Labour MP Frank Field (pictured), chairman of the committee, told FTAdviser the group of MPs has yet to make a decision on any work it might undertake on this topic but it was poised to look into the subject.
He said: "At a time when household names are going to the wall and leaving their employees short on their pensions, the gap between those at the top and ordinary workers seems bigger than ever.
"If voluntary measures to curb bosses’ pensions are proving easy to game, then Parliament ought to be asking whether the government needs to step in."
FTAdviser reported earlier this month that HSBC executives will have their pension cash allowance cut following criticism of their remuneration policy.
The bank’s chief executive John Flint received £372,000 a year in contributions to his pension, which amounted to 30 per cent of his base salary. However, HSBC’s regular employees received a maximum of 16 per cent in pension contributions.
According to a proposal from HSBC’s remuneration committee, the bank executives' cash in lieu of pension allowance will be reduced to 10 per cent.
This issue was also flagged yesterday (March 26) by the Business, Energy and Industrial Strategy select committee in a new report, where it recommended the regulator due to replace the Financial Reporting Council sought a public explanation from any company that fails to align its executives' pensions with the majority of its staff.
In November 2018, the Investment Association published its principles of remuneration which set out investor expectations on executive pay, and highlighted high pension contributions as a key concern.
It stated pension-related payments should not be used as a mechanism for increasing total remuneration, and pension contribution rates for executives should be aligned with those of the workforce.
In February, the professional body announced it would name and shame companies that pay high pension contributions to executives.