James Ashton: You can legislate for top pay but it doesn’t seem to work

I am doubtful that the EU commissioner Michel Barnier has cracked the executive pay puzzle with his latest clampdown.

It is true that boardroom pay has spiralled far faster than that of the average worker. But measuring the gap from the top to bottom of the company is meaningless if you try to compare Tesco, and its army of till workers, with the chipmaker Arm Holdings, which employs far fewer staff but a greater proportion of highly skilled ones.

More worrying is that a binding vote on pay seems to be having little effect on regular transgressors. BP’s attitude to executive remuneration, a flashpoint at this week’s annual meeting, seems to be going backwards. Far better for investors to take the matter in hand themselves, instead of introducing another code. What went on behind the scenes at the education group Pearson, which recanted on discretionary pay awards, suggests this is already happening.