Or so it would
seem, from the news today that boardroom pay for the UK’s top companies has risen almost
50% over the past year, at a time when those collecting those rewards have been
slimming down their companies and telling the shop floor workforce that they’ll
have to work longer hours for lower pay.
I was going to look
at whether, and to what extent, the performance of the companies is actually
down to the performance of the directors in any event, but Chris Dillow has
already done that job much better than I could.
Whilst there are
always some exceptional individuals around, most of those in boardrooms
probably got there by a combination of accident and luck – being in the right
place at the right time is one of the key factors. They wouldn’t agree with that assessment of
course; they all have sufficient self-belief to be convinced that they’re all
so exceptionally talented as to deserve whatever they can get.
The real questions
are why so many others seem to believe that as well; and why we let them get
away with it.
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8 comments:
I have always believed that the UK is one of the most unequal and corrupt of societies. Indeed that is one of the main reasons I want to see Wales making its own decisions. What we are seeing is an example of the corrupt rich who control the UK (including the Unionist Political parties) exhibiting their arrogance.
They caused the Financial crisis but have ensured by taking advantage of the apathy amongst the majority of people in the UK that they do not have to feel the effects. We are all in this together according to the Unionist politicians,but clearly some are in it to a greater extent than others.
This is another example as to why the UK is well past its sell by date and should be allowed to disintegrate gracefully into the sands of history.
John
Well said Britnot
We are indeed witnessing the decline and fall of the English Empire regretably we in Wales are being brouht down with it.
"Whilst there are always some exceptional individuals around, most of those in boardrooms probably got there by a combination of accident and luck – being in the right place at the right time is one of the key factors. They wouldn’t agree with that assessment of course;"
Substitute "politicians" for "of those in board rooms", still make sense? Of course it does.
Am I right - or has this (huge increases in directors' "compensation") been a recurring story since the recession began?
Captialism is bust! The Euro zone has to go begging to China to bail it out. The USA have already done that themselves. It appears the neocon gloating in the early 90s about the triumph of capitalism over communism might be seen by history as a little premature!
Glyndo,
"Substitute 'politicians' for 'of those in board rooms', still make sense? Of course it does."
I can only refer you to the words of the Rt Hon Francis Urquhart.
Lot more data on this has come out and we are told that the base rate is up by 3.26%??
These are the top 100 monster wealth creators and yes, I really believe that government should stay out of the wage fixing market, but shareholders role need investigating – I always vote against the board decisions on wages, as I believe there is someone out there that can do the same job for 20% less. If I am unhappy with the outcome I can cash in my shares and move on.
In the world of SME`s its very different and owners and exec`s I know have taken up to 60% cut in pay and in two cases 120% as they are living on their credit cards for three months.
In the non-wealth creating sector things are far less accountable, as an individual I cannot cash in my chips and leave, as faceless committee`s award back bench M.P`s a high salary for what in a very basic job, requiring little skill ,furthermore they decide the hours or need not turn up at all and still get paid.
To get shareholder value here, should not the constituency party set the salary grade and be responsible for a percentage of its funding?
John
Spirit of BME
Every Law creates its own injustice
What is being lost sight of is that the current financial crisis stems from the uncomtrolled rise of the property market which in turn led to unsustainable levels in credit indebtedness based upon an illusion of property wealth
The other side of the coin is that the minimum wage has become just that and I suspect the majority of the population are State dependents in some form or other
This is the issue that we have to tackle in Wales for there is no way that the private sector as it exists today in Wales will ever compensate for reductions in State spending imposed on us from England
It never ceases to amaze me what usually happens when a private company led by a directorship is very successful because they 'know the business' and are passionate about their business goes public. When the business is floated the owner carries away the true value into retirement and the new Plc appoints a series of 'executive staffers' to the board. These new directors often have no particular passion or expertise in the business and a disconnection is introduced between executive pay and the performance of the company. Essentially this type of ownership is parasitic rather than adding value. Somehow shareholders think that throwing more money at directors or bringing in more expensive ones will solve a problem. It usually doesn't. To solve this problem needs reform of the way ownership of public companies are structured. I also suspect that this goes some way to explain the 'flotilla effect' of smaller nations, where private businesses with turnover of global proportions tend to remain in private hands rather than 'floated' on the capital raised in the markets more easily accessible in larger nations.
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