Sunday, July 11, 1999 Published at 15:03 GMT 16:03 UK
Business: The Company File
Warning for utility 'fat cats'
Turning up the heat: Consumers could benefit
'Fat cat' bosses of privatised gas, water and electricity firms are being warned to keep down their wage rises or face a crackdown.
Trade and Industry Secretary Stephen Byers is said to be considering giving new powers to regulators to freeze prices for customers if heads of the privatised utility companies try to give themselves big rises.
He believes that there is no justification for directors in industries where there is little competition getting large increases when there is no corresponding improvement in standards.
The Observer newspaper quotes him as saying: "The government believes, given the role of the utilities in providing essential services in circumstances where customers still have little effective choice, it is particularly important for directors to set the highest standards in their approach to corporate governance, especially in relation to boardroom pay."
According to the paper, a soon-to-be-published report says massive bonuses are still too easy to earn.
Attacking big salaries for bosses of privatised utilities proved to be a vote-winner for Labour in the 1997 election and introduced a windfall tax on the companies.
Several times, Mr Byers has said he plans to curb excessive pay rises for bosses, particularly in privatised utilities.
BT chairman Sir Peter Bonfield last month received a 130% rise, putting his salary at £2.53m.
Last year, a survey revealed that directors of the water, gas and electricity utilities enjoyed pay rises averaging 18%.
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