Call to end incentives, with campaigners saying it shouldn’t take money for executives to care whether employees live or die
Calls are growing for an end to the practice of paying executives health and safety bonuses if none of their employees dies on the job, as an analysis revealed the average value of a human life in some boardrooms under such schemes is as little as £33,000.
The research, by the shareholder advisory firm Pensions & Investment Research Consultants (PIRC), looked at annual reports from 38 FTSE 350 companies in which at least one person died at work between 2015 and 2019.
It found that at least two had not reported docking their top executive’s bonus at all after employees died, while those that did imposed an average cut of £33,628 – the equivalent of less than 1% of the executive’s total annual pay.
Conor Constable, the PIRC researcher behind the report, called for the link between bonuses and health and safety to be broken, saying that keeping employees alive should be a basic requirement rather than something that merited an extra pat on the back.
He accused the firms of being guilty of a “dispassionate” approach to the tragic deaths of their workers, adding that they “appear to have quantified or put a value or a price on the life of an employee”.
Luke Hildyard, the director of the High Pay Centre, agreed. He said: “If chief executives are less likely to take the necessary measures to protect their employees if they are not financially incentivised to do so, that is a terrible judgment on their character and integrity made by their own boards.”
Constable added that if workers died on the job, the discussion should no longer be about the chief executive’s bonus but “fundamental changes to the business, its leadership and its governance”.
Contrasting the approach towards executives and staff, he pointed out that the latter would not usually expect a bonus for upholding safety standards but could expect the sack for not doing so.
The Trades Union Congress’s head of health and safety, Kevin Rowan, said: “It’s vital that employers take health and safety seriously at the highest levels of their organisation. If it’s not considered important in the boardroom, why would any manager or worker be expected to take it seriously?”
The PIRC analysis – entitled How Much is a Worker’s Life Worth? – found no evidence of a reduction in the number of deaths at work as a result of the link to executive pay.
Of the 22 firms in which an employee died on the job in 2019 – the latest reporting period – 12 made no cut to their top executive’s bonus; including two in which policies explicitly linked executive bonuses and worker fatalities. In the other 10, the top executive’s average decrease was £32,628, or 0.85% of their total 2019 remuneration.
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