Executive pay packages

Frank the tank

Across the ftse top 100 companies up by 49% over the last year. :x

I'm not interested in any business case that can be argued, there isn't one. In these times when every ordinary Joe is having miniscule pay rises, pay freezes or pay cuts can this be MORALLY defended.

I'm sure all the folks who come on here bashing and berating the "greedy" trade unions have plenty to say. It usually takes about a nanu-second for something to get posted on here when a union proposes a ballot for industial action. Very quiet on this one for some reason.

I'll just wait to be accused of the politics of envy now.

Smokin Joe

I couldn't give a sh1t what the top executives earn a year, long as I have enough to live to a decent standard I'm cool with it.

There are plenty of people on the planet (about 75% of them) who would regard me as living in the lap of luxury.

MattC59

Morally correct or not, the clue is in the title.

'Top' Executives.

If you want the best guys for the job, you hav to pay for them. Plus, the man at the top ultimately carrys the can.

If you were to tell Joe Schmo working in Tesco that now he's ultimately responsible for the company, I'm sure that Joe would want a few million ££££.

And then there's the question; Do you know exactly what they do for the money, and can you do it ?

If you don't or you can't, any opinion is void.

squired

I remember reading the results of an industry survey recently. One of the questions related to bonuses. The response was that bonuses would be phased out for normal staff and increased significantly for executives. I do find it a bit of a shame that the disparity is growing so large.

Big Hairy Wallapers

I guess if we're honest greed fuels lots of people, I'd include myself in that, if my employer told me he's willing to pay me 20k more than I currently earn I'm confident I wouldn't say Hang on that's more than I'm worth or the business can't sustain that!
I'd kiss him n skip home.
It would be nice if there were stories in the media of bosses who took a pay freeze on the promise of a healthy rise in a few years if the business has reached certain financial indicators. In truth I suspect this is the case in many companies but the media wouldn't see that as news because the reader wouldn't be interested.
We are a nation of moaners and bosses pay is something most people can get hot under the collar about.
That stimulates readers and sells papers etc.

mr_goo

I certainly understand the need to pay high salaries and bonuses to 'Top' Executives / CEOs. As already stated the clue is 'Top'. However there are many executives collecting fantastic packages without seemingly having much in the way of business acumen. Their rise up the ranks of the management ladder has been largely down to 'brown nosing' their way up.
If this seems like a rant, then yes it is. I work for a large European manufacturer where the UK MD is responsible France and Iberian peninsular. In the last 4 years he has managed to keep this area of the business performing only by asset stripping and redundancies. For this he picks up £750k pa. Good work if you can get it.

MaxwellBygraves

MattC59 wrote:

And then there's the question; Do you know exactly what they do for the money, and can you do it ?

If you don't or you can't, any opinion is void.

So I guess you won't be voting at the next election then, based on that assumption?

Let's go back to the 'morally correct or not' statement. Do you think it is morally correct?

cookiemonster

MattC59 wrote:

Plus, the man at the top ultimately carrys the can.

Off the top of my head: Stan O'Neil - took Merrills to the brink and took a $160 million package to leave. Chuck Prince; Citi cut a cheque for around $40m when he left after doing something less than a fantastic job. Carli Fiorina, something like $20m in severance. Its not new though - Frank Newman in the late '90's trashed bankers trust and picked up $50m or so

These numbers are astronomical. Do you think these guys "carried the can" when they failed?

verylonglegs

cookiemonster wrote:

MattC59 wrote:

Plus, the man at the top ultimately carrys the can.

Off the top of my head: Stan O'Neil - took Merrills to the brink and took a $160 million package to leave. Chuck Prince; Citi cut a cheque for around $40m when he left after doing something less than a fantastic job. Carli Fiorina, something like $20m in severance. Its not new though - Frank Newman in the late '90's trashed bankers trust and picked up $50m or so

These numbers are astronomical. Do you think these guys "carried the can" when they failed?

If Fred Goodwin actually carried the can he'd be flipping burgers for minimum wage for the rest of his working life.

MaxwellBygraves

cookiemonster wrote:

MattC59 wrote:

Plus, the man at the top ultimately carrys the can.

Off the top of my head: Stan O'Neil - took Merrills to the brink and took a $160 million package to leave. Chuck Prince; Citi cut a cheque for around $40m when he left after doing something less than a fantastic job. Carli Fiorina, something like $20m in severance. Its not new though - Frank Newman in the late '90's trashed bankers trust and picked up $50m or so

These numbers are astronomical. Do you think these guys "carried the can" when they failed?

Well said, take a look at Adam Applegarth, Chief Exec of Northern Rock who nearly ran the bank into the ground.

http://www.guardian.co.uk/business/2008 ... ck.banking

Massive payout. I spose someone's got to carry the can :roll:

Cleat Eastwood

but they're only top because their companies/businesses are in effect not paying a decent percentage of their profits to the people who do the real work.

So the head of tescos decides to stock pears instead of apples. A pointless decision if there were no workers to pick, pack, transport and display the wares.

I think franks point is that, as with every tory decison, the rich will benefit more than the needy.

Anyway I was more shocked to see thatcher got 500 thousand squid from a fund for ex pm's public duties.....yes a fund set up by.... J major, who himself has pocketed.....4 hundred grand. Who in this democracy of ours voted that little beauty. They're having a laugh.

AidanR

We're told that "top" executives earn as much as they do because that's how the market prices them. However, this is rather misleading. It doesn't makes sense that top executives are paid so much more than the top levels of other professions. Surely there are a whole bunch of talented people out there, and if there are greater rewards in one particular area more people will try and work there, boosting competition and lowering wages?

It all starts to make sense when you realise that the market is anything but free. Instead what you have is a relatively closed circle, with directors sitting on each others' boards, all awarding themselves big pay packets whilst restricting entry into the club. And, as noted, they do quite like to award themselves substantial golden parachutes too.

The system needs to be opened up with a shake-up of corporate governance rules. Right now it's just a club for the super rich.

markos1963

Frank I totally agree with your post but I can't help thinking 'why worry about it?' The die has been cast, people accept these rises as they have no choice in this climate. If a worker complains or dares to do anything about it( even the scandalous action of democratically voting to strike) the same old lie is spouted about how lucky they are to even have a job.
The same people tell us how lucky we are to have these captains of industry running our companies and if we didn't reward them with Danegold they'll take their wonderous abilities elsewhere. I for one would like to chance my arm and see if we can stay afloat and look after ourselves without these leeches, let Dubai have them I say.




Best cancel my sub to the Daily Mail

SmellTheGlove

I am one of those who subscribes to the view that anyone who does a good job is worth their package - however with that, you have to live with the other side which is that when you deliver a half-baked load of turd, you will be told unequivocally that your rewards will suffer accordingly. The latter position is right where we are now, according to what many people use as a hard measure of the health of our market economy, viz. FTSE100, so I'd be happier if a few of the "top" people would do their homework and realise they should be contributing their bit to dropping the average somewhat. Many employees of FTSE100 companies have had de facto pay cuts over the last three years; I am one such but, oddly, have never been told outright that my personal performance has been poor enough to warrant such a cut. This is the Wonderland that our "top" people, and evidently many of their apologists, inhabit.

RichN95.

One of my best friends is an executive at a FTSE 100 company.

He can buy his own dry roasted peanuts from now on.

MattC59

rick_chasey

Their wages pretty much literally pay mine (the big bankers' anyway), so I'm in no position to comment.

*ahem*

Cleat Eastwood

Rick Chasey wrote:

Their wages pretty much literally pay mine (the big bankers' anyway), so I'm in no position to comment.

*ahem*

Boyzer

Sadly im not right at the top, but im close.

Left school at 16 with few qualies, aquired a first class honors in my late thirties, after id worked my way up to the top of the it ladder then transferred into more general business management.

So, now in my early 40's, earn enough to enjoy all the bike porn i can handle... but am i happy? No, cos the 2012 models arent quite ready for pickup yet.

Anyway, at the risk of being attacked by trolls and real workers, who dont see what managers and bosses do, here's a short list of some the hidden issues, that can justify some of the bigger salaries.

1. You are responsible for hundreds of peoples livlihood. You get it wrong, you put them on the dole queue.
2. You never switch off, so you are effectively working 18 hour days.
3. Holidays, include taking the blackberry and the ipad, and calling it at 4am when the top IT guy who works for you, emails to say, your primary system is down and he's a bit stuck, but he has to go home now cos hes tired.
4. You have to endure individuals who are clearly on the scam, but whilst its totally fine for them to suggest they are disabled, but you cant say they arent. Anything you do, results in increased stress for them. That includes, not being able to predict what time a courier will arrive with their special furniture.
5. Yu get subjected to bullying and harassment from employees who armed with current employment legislation are protected. The employees who have to deal with such issues ultimately suffer the bullying and harassment then go sick, then move on. usually to avoid the employment tribunal, which is eventually thrown out. And by the way, dont underestimate ET's, they are incredibly stressfull, even when you are in the right, and have some of the best barristers in england with perfect records representing you.
6. Listening to people who do 'the real work' and not being able to respond, because you now, they simply have no comprehension of what it takes to be an effective, productive, consultative, decision maker, with hundreds of families livlihood in their hands. I dont doubt many people could do my job, but whether or not they would choose to, is a different matter. the problem being, the staff themselves, whilst they are a businesses greatest asset, they are usually also its greatist liability.

As a personal mission, i always find, smaller teams, higly paid, more motivated, multi-tasking, individuals, who dnt care what their job description says, are the best.

I guess thats my rant over.

Only to add, i know im paid far too much... but you know what... Just like the rest, i know im not paid enough for what i put in.

Im going to duck now!

Boyzer

Ps. Item 5. When i say the other staff suffer the bullying and harassment, i mean from the individuals claiming to be bullyied and haraassed. Whats worse, its usually union backed, and when queried, they say "so what, they are in that job, they have to deal with it". It leaves the employer virtually unable to support them.

Tom Butcher

To me it's immoral.

As for Boyzer's list - you've not really made it sound that bad.

Boyzer

I was immoral in my 20's.

sadly, this definately isnt the same.

mind u, im not in the trader bracket, with million pound bonuses every three months. Actually, ive never had a million pound bonus. but i dont grudge them that... its not like i couldnt have been on of them, i just went down the IT route.

that route is open to anyone, has been for 25 years. I helped write some trading room code back in the early 90's, all sorts made it there, thru hard work and kissing arse. Same as every other company i worked for.

the most extreme case of immorality, was the guys imported from America to design the algolrythms for replenishing supermarket shelves that minimised stock levels, based on sales thru barcode scanning. 4 of them, 8k a day each, 6 months work, took a percentage of the reduced stock levels that resulted for 5 years after. they didnt need to work again.

Boyzer

Ps. Gits.

Omar Little

A highly skilled executive at the top of the ladder with a first class honours degree should be able to recognise that if the middle and working class continue being squeezed while executive pay has high % increases then that is not in the long term health of the capitalist system - the "executive elite" are not the motors that keep capitalism running.

They might want to kid themselves on that this is not the case to justify disproportionate rewards but the cumulitive gap in income has increased massively in the last 2 or 3 decades, while median wages stagnated in real terms. The effect of this on economic growth was for years hidden due to excessive borrowing and the build up of debt - incase you haven't had time to read the newspaper or watch newsnight over the last few years due to working so hard, then this is something which has now crippled the western economic system, and seen the US and Europe in the process of being eclipsed as the dominant economic powers.

verylonglegs

He can't even spell simple words and even uses txt speak. If he's an executive it's no wonder the West is toast. (Probably a troll though.)

Boyzer

Hahahha.

Ok, if you wish to get philosophical....

Sadly the entire foundation of capitalism is flawed. I dont have a solution for it, but any system based on money which actually doesnt exist, is flawed. You lend a bank £1, they lend £1.80 forward. So, then, with fEw companies actually having much in the way of cash, as they are geared, with end of year profits removed to shareholders pockets. then, individuals are encouraged via loans and credit cards to buy things and pay more for things, they couldnt afford in the first place., whether it be a house or a plasma.

its a house of cards, which bankers are suddenly getting the blame for, because plain and simple it has collapsed.

Think back... When did the bankers suddenly become so hated? MP's expenses. Every time you hate a banker, you've been suckered by politicians.

Ok, coming back to the philosophical discussion about have and have nots... yes we should worry about the gap getting wider, but ultimately, if you are a have not in this country, compare yourself to a have not in the third world. You have a health system, education, accomodation and food safety net. What more do you want? Your own home? Work for it. Big car? Work for it. two plasmas? Work for it. the rest of us did.

One can never justify the pay differential in solders on the front line defending our way of life, or nurses who are there in our hour of need, against those who work hard and earn silly numbers. but at the end of the day, it was individual choices that put all parties in their current roles, with a tad for luck and fate thrown in. But in this country, we all know, you work hard you can earn a good living. If you want more than that, forget about what others have, because that is jealousy or greed, make your own choices in the full knowledge of what the rewards are.

One are i would agree with you, is that Alan Smith back in the 1800's wh is ultimately responsible for the current method of measuring GDP, needs his theory amending. Ps. He's on the back of the £20 note if you take the time to notice. His theory that nation states should not be measured on the basis of their stock piles of gold and silver, but rather their trade, needs it adjusted to remove the majority of financial instruments removed from it.

In 20 years time, we will look back, and hilight this period of econmics as the point at which UK and USA and the rest of the eurozone stopped being econmic superpowers. We are now reliant on FDI, in begging bowl fashion to china.

Forget about the have and have nots, start focussing on democracy built on debt. or rather, what the alternative is. Its doomed.

Boyzer

Its cos im on a phone and a tad merry.

Apologies for the txt speak and mis-spellings.

But id rather discuss the merits of my message, rather than my awfull spelling, which has never been good.

Richard_D

There are greedy Bar stewards on both sides of the fence. There are ex union leaders that are claiming large expenses from unions after they have left. Do I like the fact that senior executives take home has gone up so much? No I do not . I don't like how much professional footballers wages have gone up either. Is Chris Hoy really worth less per year than any Premier league player per month?

I also realise that top excutives pay is not just salary. A lot of it is bonuses and some of those bonuses can end up getting paid over years. So could be the result of a contract won years ago but only completed this year.
To get a real feel for this we need the data not the stats. A very large bump up for a few could have skewed the data as could some senior figures taking reasonable figures this year after taking little or nothing in previous years. When IBM were in trouble a few years ago their CEO one year had a salary of $1 and a bonus if he acheived a certain level of profit.

Boyzer

Oooh... Unions.... dont get me started...

Have you seen the grace and favour properties A certain union chief was given, in his tenure. Cpl of million at least. His recent successor, had to honour the packages pre-offered to the deputy chairs by the previous chief. Shocking.

there is greed everywhere, in every role, function and level. Sometimes its institutional, sometimes its individual.

Boyzer

CHris Hoy is worth far more than every footy player.... Except for spurs players.

rick_chasey