Motability CEO's £1.7million pay packet slammed

Motability CEO's £1.7million pay packet slammed

The £1.7million salary dished out to the Chief Executive of the firm who runs the Motability disabled car scheme has been slammed by MPs as ‘totally unacceptable.’

The BBC reports that Mike Betts’ salary has risen 78% since 2008 when it was £954,000. Frank Field MP, Chair of the Work and Pensions Committee said the salary is over ten times what the Prime Minister earns.

Motability, the firm who arranges cars for disabled people in exchange for some of their state disability allowance, said that Betts’ pay was based on a comparison with FTSE250 firms. However, Motability Operations, who run the scheme, are a monopoly and face no competition.

Whilst the Department for Work and Pensions acknowledged the valuable service Motability provides to disabled people, the “levels of executive pay and financial reserves are concerning," said a spokesperson.

The Treasury and Work & Pensions committees are asking that the Government explains whether state assistance to Motability Operations are an appropriate use of public funding. The committee found that funds of £2.4billion were being hoarded by the company, although Motability Operations denied this.

They also said Betts’ pay was reviewed against the market to ensure it is “both competitive over the long term and to make sure that any rewards are related to performance especially in relation to the quality of service provided."

The questions over Betts’ remuneration mirrors those that many Board are facing. Increased shareholder and public criticism of high executive pay has prompted change across some Boardrooms with Executive pay slashed as a result.

For example, Rakesh Kapoor, CEO of Reckitt Benkiser, has had his pay cut for a second year running, the result of shareholder pressure.

Chris Philp, Conservative MP for Croydon South, noted that shareholders need to take an active stance against undeserved Boardroom pay packets. Philp said: “Shareholders are not engaged and are frankly being a bit lazy."

"They are not active, energetic custodians of their own capital."

"A symptom of that is out-of-control executive pay – not just high amounts but also lack of alignment between pay and performance.”

To see which other companies have reduced their CEO pay as a result of the backlash, click here.

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