Speaking yesterday at the Coin Street Neighbourhood Centre in South London, Miliband said there were those at the top and the bottom of economy, who were not showing responsibility and were "shirking their duties" - from bankers who "caused the global financial crisis" to some of those on benefits who were "abusing the system" because they could work, but didn't. He said: "We must create a boardroom culture that rewards wealth creation, not failure.
"To those entrepreneurs and businesspeople who generate wealth, create jobs and deserve their top salaries, I'm not just relaxed about you getting rich, I applaud you. "But every time a chief executive gives themselves a massive pay rise - more than they deserve or their company can bear - it undermines trust at every level of society."
Miliband added: "Too often, we see people getting pay and rewards which are not linked to what they have achieved. This isn't just unfair - it's bad for business, jobs and our economy."
Miliband presented the example of Rolls-Royce, which he called a "great British business, world-leading, innovative". He said: "Sir John Rose, who recently retired as its chief, was a great British business leader, creating wealth and keeping jobs in this country."
But he continued: "In contrast, Fred Goodwin, who ran the Royal bank of Scotland, was at the heart of the irresponsibility which led to the collapse of the banking system. He helped bring our country's banks to their knees.
"And yet at the time the financial crisis hit, Fred Goodwin was being paid over three times more than Sir John Rose. What greater evidence could there be of the failure to link pay and performance in our boardrooms?"
Miliband said the danger today is that pay and performance have become detached again. He said: "Over the past 12 years, chief executive pay in Britain's top companies has quadrupled, while share prices have remained flat.
"And according to the recent High Pay Commission report, just in the past 10 years, the pay of someone at the top of a company has gone from 69 times the average wage to 145 times.
"Things haven't always been this way.
"As other countries require, we need companies to justify and explain what they are doing. On pay, companies should publish the ratio of the pay of its top earner compared to its average employee.
"If it can be justified by performance, they should have nothing to fear. We need shareholders to better exercise their responsibilities to scrutinise top pay.
"Some companies already understand that having an employee on the committee that decides top pay is the right thing to do."
But commenting on the speech, Jon Dymond, director at management consultants Hay Group, said: "More equal pay does not equate to better business performance. "Of course, a cap is aimed at achieving fairness, not performance, but who is to say what level of cap would be fair?
"A blanket cap on executive pay would ride roughshod over the unique differences between firms' business and operating models."
But he added: "This calls into question whether CEO pay is truly fit for purpose. There is little or no adaptation to what companies actually do, or to the unique challenges of driving value in each firm.
"CEO pay should ultimately reflect the outcome of the bets the executive has to make."
