Directors' pay rose 50% in past year, says IDS report

[dikkertjedap]

Obscene in my view

It depends how the package is made up. If it has significant amounts of stock options, then that is only realised when they are exercised and they are a major incentive for the executives to do a good job and grow the company.

Why is it obscene? They are FTSE companies meaning that anyone can buy shares in them and own a part of it. If you don't like it buy some shares and vote against it. If you don't own any shares in them then it's really nothing to do with you what someone else gets paid.

These are not public sector companies you are forced to use. If you feel that strongly about it then stop buying what they make/sell/do.

Directors' pay did not rise by 50%. Directors' pay in the FTSE 100 companies (by definition, there are only 100 FTSE 100 companies) rose on average by 50%. And 2/3 of those companies are not UK based.

So, some directors in 33 UK companies had their pay increased by 50% or more.

By all means complain about the vast amount of money that some people earn compared to the pitifully small amounts of money that some other people earn - but tell it like it really is. And don't forget that people who earn a lot of money also spend a lot of money. And that creates work. Also remember that these directors employ lots of people (compared to other people who earn lots of money, such as footballers or pop stars).

Agree with wicket. The is a reasonable assumption that you can do with something that you own what you like.

It's no more reasonable for an owner of a FTSE company to tell you what colour to paint your house than it is for you to tell them how to run the company they own.

Where did the money come from?

Presumably the company's earned it in large quantities aliceliddell

[http://en.wikipedia.org/wiki/FTSE_100_Index]

This website provides a list of the 100 companies in the FTSE100. To answer your question alice - the money comes from people/other companies buying the goods and services that these companies provide - it's a two-way street. And unless you've just parachuted in from outer space, I would imagine that you have spend some of your money with some of these companies - and got goods/services in return. That's how the system works.

I'm not saying that it's right that these directors are earning so much money - but I'm just trying to put it into some sort of perspective.

There uis nothing wrong with pay rising 50%, its when company performance has fallen at the same time and those same people are piously droning on about the need to keep wage inflation in check that the absurdity starts to emerge.

But the real culprits are the boards and shareholders who should be more vigilant. In many European countries there is a workers rep on the board so the whole scam is much harder.

At a time when many ordinary people are going to the wall, facing large hikes in utility bills, travel costs, food bills, wages rising slower than inflation etc etc... It seems obscene that someone gets a 50% rise in pay over a year.

It just makes a joke of Cameron's ' we're all in this together ' mantra. Clearly we're not.

Cameron's solution is to get more women in the boardroom to drive down pay.

I don't think he thought that one through.

These profits, then. People work and get paid (money out), stuff is sold to people (money in). The difference between the two is profit. Both work and money in are provided by us. How is this none of our business? A quaint notion.

the idea of a high pay is the directors are being compensated for taking a high risk is flawed. latest research says people reponds well to a small reward for performance & but act less productively if the reward is larger.

TheReal didn't work too well for the banks, did it? But they'rr still at it...

YANBU OP it is disgusting and should be illegal.

The UK is one of the most unequal countries in the world in wage terms - no wonder we have got such terrible social problems.

Nobody's work is so valuable that they deserve that much money, while the rest of us are paying the price for the recklessness of the banks.... that's my tuppeny ha'penny worth!!

so there!

While I agree that some of these salaries (and % pay rises in a year) are beyond belief at a time when most of us are on a pay freeze, a majority of these companies employ thousands of staff and "make" billions £££££ of profit each year, which ultimately is for the good of this Country as the money the employees earn is ploughed back into the Country.

I would much prefer to see a competent business man earn £millions than a footballer, or TV presenter.

become a director yourself.

YANBU OP it is disgusting and should be illegal.

Illegal?

How do you imagine it can be made illegal for the owners (or shareholders) of a company to pay its directors whatever it likes?

What do you suggest the law should make the company do with the money it makes if it can't use it to pay staff?

If you think the state should confiscate the money, I suggest looking closely at how well removing property rights has worked for Hugo Chavez.

Erm, don't think anyone mentioned removing property rights ShellyBoobs... bit of an extreme interpretation!

Look at Japan - thriving capitalist economy, CEOs earn nowhere near the sums they do in UK, USA and other western economies, and they take a hit when their companies' profits do.

Quite simply, there is no need for anyone to earn as much as that. Nobody deserves that level of salary!! And as for ploughing it back into the economy - the lion's share is probably sitting offshore in the Cayman Islands. It's the poor that are having to pay to get us out of this recession while FTSE directors are getting pay increases on a frankly surreal scale. How exactly is that OK?

Grevling "It's no more reasonable for an owner of a FTSE company to tell you what colour to paint your house than it is for you to tell them how to run the company they own."

Grevling, you have made a mistake. The FTSE company is not owned by the directors. It is owned by the shareholders. The directors are hired hands who are supposed to run the company for the benefit of the owners. The ultimate owners are the little people who have dribbled their money into a pension, or perhaps own some unit trusts. Almost without exception, none of these ultimate owners are asked how much money they want to shovel into the pockets of these greedy trough-snouters.

diabolo "a competent business man"
Like Fred Goodwin, you mean?

There was an interesting discussion around this, basically stating that this pay is regulated by a board...comprising of each other's peers so there was a vested interest in allowing large pay rises. The conclusion was that this needed to be changed, maybe by introducing external regulation or adding a few outsiders to the panel. Personally I kind of think the private sector has to manage itself.

I'd be in favour of a maximum pay multiple - the CEO should earn no more than say 30 times what the company's lowest paid worker earns. No-one needs £millions a year in pay (and I include footballers in that).

Alternatively we should leave things as they are and tell these highly-paid professionals to stop whinging about having to pay 50% tax on anything over £150,000.

Erm, don't think anyone mentioned removing property rights ShellyBoobs... bit of an extreme interpretation!

Erm, I don't think I mentioned removing property rights either! I was pointing out that state interference is often not in the best interests of the populace, using Venezuela's abuse of property rights as an example.

Anyway, how else would you propose to limit directors' pay?

Saying Japanese companies don't remunerate at the same level and that 'there is no need for anyone to earn as much as that', is fine but going to an FTSE 100 company and telling them as much isn't going to change a lot is it.

ShellyBoobs
"Anyway, how else would you propose to limit directors' pay?"

If the true, ultimate owners actually had a say, they might possibly be less sympathetic to the Bonus For Failure mentality.

YANBU it is obscene and why aren't more people livid about it????

Never mind, I'm sure they give loads back to the charities and the vulnerable who have been shafted after we bailed out the incompetent directors of the banks...

@alice "These profits, then. People work and get paid (money out), stuff is sold to people (money in). The difference between the two is profit. Both work and money in are provided by us. How is this none of our business? A quaint notion."

You're forgetting that you got paid to do the work and a product or service for the money that you paid in. You don't own the company, your a customer.

If you don't like the way they pay people shop somewhere else.

@PijletJohn "Grevling, you have made a mistake. The FTSE company is not owned by the directors. It is owned by the shareholders."

No, I made no mistake. I never said the company was owned by the directors. It is run by the directors and owned by the shareholders. You are correct.

The owners are collectively happy with these pay rises. If they were not then they have the opportunity to vote against them/sack the board at the AGM. Hence the phrase "its unreasonable for you to tell the owner (i.e. shareholder) how to run their company than it is for them to tell you how to paint your house".

"Almost without exception, none of these ultimate owners are asked how much money they want to shovel into the pockets of these greedy trough-snouters."

Go to the AGM. Have shares can vote. If you have 0.00003% of the shares though you get 0.00003% of how they pay people. Simple concept really.

@PointyBlackHat "I'd be in favour of a maximum pay multiple - the CEO should earn no more than say 30 times what the company's lowest paid worker earns. No-one needs £millions a year in pay (and I include footballers in that)."

This could be a reality. If you got a controlling interest in a company.

Oh wait we're back to the you don't own it but you still want to tell people what they can do with it argument.

Well ok, starting from now I reckon none of you should be allowed to drive the cars you own on a Thursday. I don't own any of your car and just because I don't drive on Thursday I don't think anyone else should either.

Like I said before if this bothers you that much stop buying what they sell and only buy from small local companies that don't pay the directors shit loads.

Grevling
"Go to the AGM. Have shares can vote. If you have 0.00003% of the shares though you get 0.00003% of how they pay people. Simple concept really."

No, that's not true. Vast amounts of the shares of FTSE100 companies are held by life and pension funds, or collective investments. The ultimate owners are the small man and woman in the street (or in the case of companies such as Northern Rock, or Royal Bank of Scotland, the Taxpayer in the street). However the investment companies generally sit on thir hands, and do not ask the ultimate owners how the votes should be cast. This is generally considered to be because the directors of those funds management companies are on the same gravy train and don't want to rock their boat.