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EU official slams 'irresponsible' executive pay

AFP · 23 May 2008, 09:04

Published: 23 May 2008 09:04 GMT+02:00

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“In my opinion some salaries are completely irresponsible,” EU Economic and Monetary Affairs Commissioner Joaquin Almunia told the Frankfurter Allgemeine Zeitung newspaper on Friday amid growing criticism of high corporate pay packages.

On May 14, the head of eurozone finance ministers, Jean-Claude Juncker, said his colleagues were considering ways to clamp down on “scandalous” pay packages for senior executives.

Terming huge compensation schemes “quite scandalous” and a “social scourge,” Juncker said finance ministers were in particular looking to plug loopholes that allowed tax deductions on generous severance packages in many countries.

The debate over corporate pay has heated up in several European countries as those lower on the pay scale find themselves squeezed by high prices for food and energy.

German President Horst Köhler has accused bosses of threatening the country’s “social cohesion” with huge pay-outs.

Board members at German carmaker Daimler saw their salaries jump 45 percent in 2007, a year marked by the company’s controversial sale of Chrysler after failing to stem losses at its former US unit.

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Meanwhile, German workers have seen their purchasing power fall 3.7 percent since 2003 owing to inflation and meagre wage increases, a recent study found.

A widespread tax fraud scandal in Germany also raised tension in February when officials revealed they were investigating hundreds of wealthy Germans suspected of stashing funds in the Alpine principality of Liechtenstein.

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