EXECUTIVE PAY has risen so high that there is no “credible link” to bosses’ performance, MPs warned yesterday.

In a new report, the Commons business select committee said Sir Philip Green’s handling of the BHS pension fund had shaken the public’s trust in corporate governance.

The committee described executive pay as “fabulously high” and “increasingly far removed” from workers’ wages, with the average total pay of FTSE 100 chiefs having risen from £1 million in 1998 to £4.3m in 2015.

It is now calling for a crackdown on excessive pay and for workers to be represented on remuneration committees.

Committee chairman Iain Wright said: “Executive pay has been ratcheted up so high that it is impossible to see a credible link between remuneration and performance.

“Pay must be reformed and simplified to incentivise decision-making for the long-term success of the business and to pursue wider company objectives than share value.”

The committee’s report also backed calls for pay ratios to be published annually.

In addition, it proposes a target should be set for half of all new senior management appointments in top companies to be women. MPs further suggest a new voluntary code of governance for private firms.

“The UK corporate governance system is recognised throughout the world as of high quality,” Mr Wright said.

“However, recent scandals and the issue of executive pay have undermined public trust in corporate culture.”

TUC general secretary Frances O’Grady welcomed the report, saying: “British people are fed up with the bad behaviour of big business.

“Workers are getting a raw deal and our economy is harmed by short-term thinking in the boardroom. Reform is badly needed and the government should take up many of the excellent ideas in this report.”

But she said the committee’s support for worker representation on boards was unlikely to become the norm without it being made obligatory.

“We encourage the Prime Minister to stick with her original promise to require companies to put workers on boards,” she said.

Executive pay at some of Britain’s largest firms has come under increased scrutiny in recent years.

Recent company AGMs, such as that of advertising giant WPP, have seen unprecedented opposition from investors in a movement dubbed the “shareholder spring” by the Financial Times. The paper recently predicted an “even bigger rebellion” this year.