The European Trade Union Confederation is demanding an end to excessive pay and benefits packages for company managers, which could put at risk the future of enterprises in the European Union.

The European Commission is tomorrow (6 October 2004) due to approve a Recommendation on remuneration for executives in companies operating in the EU.

The ETUC is urging the Commission to put forward a set of clear, precise proposals providing for greater transparency and more control by shareholders and stakeholders over managers’ pay awards.

“In most companies, directors’ pay and benefits are currently set at the discretion of management, subject to no other criteria, and often reach outrageous figures,” says ETUC General Secretary John Monks. “This dubious state of affairs is becoming unacceptable at a time when companies are forcing workers to limit their wage demands, to make sacrifices and even to work longer hours for no extra pay in order to reduce labour costs. “Executives’ remuneration also contributes to the cost of labour, and we are no longer prepared to pay the price of bad company management practices.”

The ETUC is calling on the Commission not only to set standards and strict criteria for directors’ remuneration, covering benefits such as bonuses, pensions and share options, but also to provide for a monitoring system to check that settlements are fair, and annual company reports on directors’ income to be available not only to shareholders but also to stakeholders.