In a sign that the Occupy London protests might be having some effect, a prominent member of the British government recently signaled that he would be willing to limit executive pay.
U.K. Business Secretary Vince Cable said on Saturday that he will legislate limits on executive pay if necessary, according to Bloomberg News.
The high level of executive compensation "causes a lot of public anger and indignation, and you know we've seen some of that spilling over into protests in recent weeks," Cable said Saturday in reference to the Occupy London demonstrations, according to the Daily Mail. "I think it does reflect a feeling that a small number of people have done extraordinarily well in the crisis, often undeservedly, and large numbers of other people who have played no part in causing the crisis have been hurt by it."
The Occupy London protests -- inspired by the occupation in downtown Manhattan -- have focused in part on excessive executive compensation. A statement on the Occupy London website reads: "After huge bail-outs and in the face of unemployment, privatisation and austerity we still see profits for the rich on the increase."
A recent study by the High Pay Commission found that executive compensation in England has soared even as companies do worse. Indeed, according to the report cited by Bloomberg, British directors' salaries have risen 64 percent over the past decade, while the average share price of FTSE 100 companies declined 71 percent. The study also found that since the 2009 recession, British directors' incomes have risen nearly 75 percent.
British Prime Minister David Cameron called the findings "concerning" after the report's release in late October, according to an earlier report by Bloomberg.
It's not that the entire financial industry is fighting back against such ideas. Some within London's financial industry said that they are overpaid and overly obsessed with bonuses and that the income gap between the rich and poor is too large, according to a recent survey cited by The New York Times.
Excessive corporate compensation has also been criticized in the United States, including by President Obama. But Obama's attempts to curb executive pay have been limited. He placed a $500,000 salary cap on firms that received federal bailout money, according to the Wall Street Journal, but that applied only so long as they were receiving bailout funds.
Some banks, including BofA and Citigroup, left the Troubled Asset Relief Program early in order to avoid limits on executive pay, according to The Huffington Post.
The Dodd-Frank Act includes a provision requiring federal agencies to prohibit compensation incentives that might be excessive or lead to losses for regulated companies, and the Federal Deposit Insurance Corporation is weighing imposing rules on executive compensation, according to Bloomberg.
The Securities and Exchange Commission is additionally considering placing limits on Wall Street bonuses, according to The New York Times.
Still, executive pay continues to soar in the United States. Total compensation and benefits at public Wall Street firms hit a record $135 billion in 2010, according to The Wall Street Journal, as companies continue to race to pay executives more than competitors.
A recent Federal Reserve report found that Wall Street firms have only modestly adjusted their pay structure in order to improve incentives, according to The New York Times. Most Wall Street professionals expect a bonus at least as high as last year's, a recent survey found.
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