Now even the bosses admit boardroom pay is too high

Influential bosses' club the Institute of Directors today admitted that directors' pay is too high as the debate escalated over excessive remuneration.

The IoD warned that "the current pace of executive pay is unsustainable". Business and financial groups have been rushing to make their views known as today was the deadline for submissions to Business Secretary Vince Cable's discussion paper on executive pay.

The High Pay Commission complained this week how bosses' pay has galloped far ahead of the average employee in the past 30 years. The UK Sustainable Investment and Finance Association, a trade body for asset managers that promotes responsible investment, demanded greater transparency.

Anger has surged after Income Data Services showed that FTSE directors' pay packages leapt 49% last year and the "Occupy" anti-capitalist protests sprang up outside St Paul's Cathedral and in other cities.

IoD director-general Simon Walker said: "We are aware of the difficult challenges faced by remuneration committees in responding to a global market for executive talent. But the current pace of increase in executive pay is unsustainable. The legitimacy of UK business in the eyes of wider society is significantly damaged by pay packages that are not clearly linked to company performance."

The IoD called for a "substantial simplification" of remuneration packages and more "objective scepticism" by boards. It also supported calls for a binding shareholder vote on executive pay. IoD members include small and medium-sized firms but the intervention is significant given the group's pro-business reputation.

UKSIF demanded in its submission to the Department of Business that companies should disclose pay ratios in their annual reports. Penny Shepherd, UKSIF chief executive, said: "The pay multiplier for senior executives compared with the average employee can affect productivity as well as reputation."

Nicholas Stretch, a partner at City law firm CMS Cameron McKenna, warned that a binding shareholder vote would "create significant legal and practical problems".

Cable has given no date when he expects to respond to submissions.