To think we shouldn't want CEOs to earn less, but ask average workers to earn more - 'Fatcat Wednesday'

[Spice22]

Hello all ,

I've just been reading an article on 'Fatcat Wednesday' , which basically says that FTSE 100 bosses will earn the average salary (£28,000) in two days.

www.bbc.co.uk/news/business-38498003

The general opinion seems to be that this is outrageous and it should be reduced to match the average worker (not £ for £ but ratio wise). I disagree. Insteading of racing to the bottom , I think we should be fighting for higher wages. AIBU ? This is a topic that really interest me and I'm curious as to why people would resent someone's hard earned money. I know minimum wage earners work hard too, but that's why I say we should be fighting for an increase in their wages, as opposed to taking from those at the top.

I've also heard people comment to my relative "alright for you, you just get showered with money" in a resentful tone - why is this? Why can't we be happy for others and focus on improving our own instead of taking others down to our level?

"My own is that jealousy never made me happy and if someone has more financially so what? They may still be just as likely to be seriously, ill, suffer divorces and deaths, be mentally ill. Those are the things that really matter, not whether you can afford say the sky holiday I just took the children on. "

• it isn't about your personal happiness. It's important to separate your personal necessarily self centred ways of achieving happiness from what is good for the company. If you have found a way of being happy despite being poor, then well done. It doesn't mean that it is good for the country for a lot of people to be poor - poor past the point of comfortably affording basics. When working people struggle to afford basic things, there is a problem. If you are not one of these people, good. If you are, but have found a way to somehow overlook it day to day in order to stay positive, good. If you are thinking about public policy then there are bigger questions to be answered.

• illness and divorce hurt much more if you don't have money. For a start, money problems are the cause of much ill-health (physical and mental) and many relationship problems. Secondly, even when not, money helps. Divorce is a bastard when it means you are now living in a bedsit and can't afford to see your friends and have nowhere for your children to sleep. (Loneliness kills - it actually does.) Divorce means something else entirely when your material circumstances are still very good and you can afford to take the children anywhere you want, any time you want, and have your friends over any time.

• We live in a democracy and have an absolute responsibility to understand the effects of the actions (or failures to act) of our government. It may be that personally all this is difficult and wearing to think of. This has nothing to do with jealousy, though. It is being an adult, and stepping up to analyse the way the country that we are the electorate in is operating in; and taking a view on that.

Even if the U.K. Government found a way to cap or restrict executive comp, the best would simply work elsewhere. Many executive directors spend a huge amount of time travelling already - being based elsewhere or employed by an overseas umbrella company wouldn't be a problem.

The complexity of The CEO role has exploded in the last 10-20 years. Again, take TEsco. If you work in store, your role has changed marginally. The till is more technical and you probably use an electronic ordering system for stock rather than a notepad. That's about it. Now the CEO has seen an explosion in technology, compliance, regulations, employment law, competitive landscape, globalisation, consumer trends, and massive personal reputational risk. There genuinely are very few people who can manage that degree of complexity, lead a big organisation, communicate effectively with the city, and have the stamina to work 18-20 hours a day.

In order to increase the wages of those at the 'bottom'...where exactly do you think the money will come from?

This.

OP your argument is a bit like wanting to increase public spending without raising taxes or borrowing. Yeah sure it would be nice but it's not possible!

"people would work elsewhere"

Let them, as has been demonstrated there are few links with high executive pay and high performance.

I work in a private company, but quite a small one, so there is me, my boss, then the CEO in terms of reporting line.

Not for all the tea in China would I want my CEOs salary, because his job sucks. He has to travel 3 (long haul, multiple trips plus short haul in between) out of every 4 weeks on average, do loads of things I'd hate, has to represent the company to the Board of Directors and get roasted when performance doesn't match plans, takes the flack when there are no pay rises.

Whenever I see him, he generally looks like shit, knackered and unhealthy.

Nah, I don't begrudge him a penny of his salary. I don't want it.

Spice we aren't all billionaires because businesses, corporations, public sector organisations are all pyramids. There will always be more people at the bottom than at the top, but that doesn't mean that the earnings of the people at the top should be hundreds of times higher than those a few layers down the organisation. It also doesn't necessarily mean that the people further down the pyramid are any less talented or capable.

I found an article from The Telegraph from two days ago with this headline:

"NHS hospital bosses given pay rises worth more than a nurse's annual salary"

The article goes on to say:
-"40 per cent of trusts increased executives’ wages by at least £5,000 during 2014-15"
-"Some managers’ earnings rose by almost a quarter, the findings from more than 200 NHS trust boards show."
-"In total, 40 per cent of boards made at least one pay rise of between £5,000 and £15,000. At least 10 senior managers received rises of at least £20,000, according to the analysis by the Telegraph."

While....
-"The Treasury promised most public sector workers a rise of one per cent in 2014-15"

I would like to think that most nurses are clever, hard working, dedicated, and we all know the difficult and long working hours that many of them endure I just can't agree that they are worth so much less than executives.

The problem with the whole system is the representatives of the main shareholders work, in the main, for large plcs who have the same renumeration structure so are never going to vote for a wholesale change of the system. I used to work in financial services, not in a particularly highly paid role relatively speaking, but I'd still take home a bonus almost as large as my PhD-holding DH's salary (on top of a wage that was at least 60% higher than his). The stress of my job didn't keep me awake at night (his is quite stressful with long hours) and I don't think anyone I came across in my department was uniquely talented (although they were more likely to be privately educated).

It just isn't the case that things to do with money are impossible. Things used to be different. Things are different in other countries. Things can be different.

It is true that you can't make single changes - making changes affects a whole system, and it can be complex.
That isn't the same as "not possible".

You can't change the weather.
you can't change the laws of physics.
Humans control money and decide whm to give it to, and how much. They can change this.

Agreed, and we need to be clear in whose interests governments are serving. I can't see how a government can effectively govern for the whole of the society they are supposed to represent if the resources of that society are distributed in a very skewed fashion.

I think that applies to brexit too! Think someone else pointed this out but the difficult thing about brexit is the dichotomy between what the people voting for it want, and what the elected people campaigning for the vote want.

The elected people want more privatisation, more free trade, less protectionism and more globalisation.

The people voting want protectionism, good public services and less globalisation.

In the last few years no one has taken a higher hit and paid a greatly increased share of tax than the higher paid. All the statistics prove that.

Secondly I agree that if absolute poverty is an issue in a country then that is not good for anyone. However once that is addressed I see no problem with a few very successful people whether that be at football (US$62m highest paid) , running Saatchi and Saatchi (he is on £60m a year) or law firm equity partner in one of the very few top law firms on £2m a year doing well. I would like public sector pay curbed for pointless managers and cutting out layers of not needed management and a much flatter structure.

People say if those like I am who can work anywhere with an internet connection would go abroad if our tax rates rose from 60% (the marginal rate etc when the personal allowance goes) to 90% let them go that's fine. I would not stay if too much more income tax were taken and people can say good riddance if they want to. I suspect the less well off would rather everyone were badly off and their own incomes were less than that others have more than they have as again studies have shown.

I can't be arsed with the waffle about the highest paid paying the greatest share of tax. If we live in a country with massive income inequality, where the richest have a huge proportion of the total income of the country, then of course the richest are going to pay the largest share of tax, that's basic maths. All other things being equal, if the share of tax paid by the rich increases then it's because income inequality has increased, the richest have an increased share of national income and is a pretty sad state of affairs.

Tax as acts as a way of levelling out the received benefits of living in a society across the people and is an essential part of a cohesive society.

BTW the highest paid pay half of all tax, but a lower proportion of their income in tax in total.

Income tax only accounts for 25% of the entire tax take.

The wealthiest benefit the most from the society in which we live so should contribute the most.

I am relaxed about CEOs earning a lot, but I think it needs to be linked much more closely to long term performance without a small circle of 'professional' Board members and other Execs with their own vested interests agreeing the KPIs against which the success is measured.

Nobody's intellectual labour is worth £28k in two days. It's obscene and ridiculous.
Obviously it would be great to increase minimum and average wages too but the top salaries are just insane.

"I suspect the less well off would rather everyone were badly off and their own incomes were less than that others have more than they have as again studies have shown."

If that is the case, then it is rational, if curbing top salaries is necessary to keep decent (or even modest) lifestyles affordable for the many.

"would you rather have 100 pong-units and I have 150 pong-units; or would you rather have 200 pong-units and I have 1000 pong-units?" is an unanswerable question as we don't know what pong-units are.

Pounds are similar to pong-units in that the answer to the question should be "I don't know, what can I get with them?"

If you having 1000 pong-units means I can't afford to live in the city I grew up in where all the houses now require you to have 500 pong units, then of course it is rational to want to make mine go further by limiting how many you have.

If I mess up , it can be solved - if a CEO messes up , hundreds - if not thousands - will lose their jobs

Well what we've learnt from the banking crisis is that CEOs can fuck up, making hundreds/thousands lose their jobs, and they still get a bonus.

I don't know any CEOs - that's just my opinion from what I've gathered

I know some, but they are CEOs/Owners/Bosses of a small company - they had previously been all workers together in a bigger company and started their own. They work alongside the 'normal' workers and don't give themselves huge pay compared to the workers. Obviously small companies do work differently, and the type of company makes the position of the CEO different, but I certainly prefer that type of CEO to the type that earns hundreds of times more than their workers and probably has no actual experience of the work done by the workers.

We will never reach agreement on this thread.
I don't agree the better off are not paying more and more. Surveys have shown a narrowing of the gap over the last few years. The bottom have had their biggest rise in pay in 25 years (1 in 4 people with the minimum wage rise) and people on say £160k a year under PAYE or even self employed partners who have no choice whatsoever but to pay income tax rather than corporation tax, CGT etc are paying more tax than ever. They don't even get the single person allowance any more. They do not expect people to weep for them but they are certainly taxed much more heavily than before and have seen a big drop in take home pay, much more so than people on say £20k to £40k. The tiny tiny number of people who are super rich can just be ignored are there are not many of them.

The better off aren't paying more than they have historically paid, in fact they pay a smaller percentage of their income in tax than they did at any time between 1945 and the mid 80s.

Take home pay on £160,000 is £96,367 without allowing for pension payments. Or £1,833 per week.

Paying yourself corporation tax or CGT was a scam and a dodge and unfair.

You still pay proportionally less of your income in tax than those at the bottom, who you are telling me have had their biggest pay rise in 25 years? What because they got a higher minimum wage ?

You pay tax because you benefit from the society you are in, at that wage level you are not earning it alone, you rely on all sorts of different things to work and pther people. Don't whine about how much tax you pay.

YABU, to a degree. I don't think they should be paid less out of principle or that there should be some enforced limit imposed on their income, but if they actually paid their staff properly most of them would have to take a pay cut as the money just wouldn't be there. And that, of course, is why they don't pay their staff properly.

The wages of top CEOs is obscene. They don't earn it and they don't need that much.

Over here in New England our state just voted to increase mim wage to $15.In the lead up to this we had some really interesting discussions. I was against the increase because it meant that a McDonald's worker would earn the same as BIL who is a Paramedic and it seemed unfair.

At work we employ several guys Omni minimum wage so we decided if we had to give them a pay rise then everyone else would have to get a raise to maintain the separation. Otherwise the unskilled guys would be on the same pay as our graduates.

As our wage bill goes up our prices go up. The same is happening across most company's. so the end result is you earn more but bills are more and you are in the same position.

Many CEOs get their jobs because the companies shareholders think they're a safe pair of hands. Some CEOs will actually be expected to bring in investment as part of their contracts. CEO for my company, for example, brought in over 1 bn dollars in their first year by securing a government deal because of his personal contacts. I don't think any of uslower earners in my company disagree with his multimillion pound salary, he thoroughly deserves it, but it would be nice to get at least a nominal inflation related pay increase every year. My actual pay hasn't increased for years.

The UK minimum wage rise has given a pay rise to 1 in 4 British people but I agree it then affects differentials higher up. It is a rather blunt instrument. I prefer that increase though to increasing tax credits paid by the state to working parents. I don't see why the state should subsidise low wages paid by employers through benefits which is what has been happening.

blogs.spectator.co.uk/2015/04/george-osborne-has-squeezed-more-from-the-rich-than-any-uk-chancellor-ever/ Although I was trying to find the articles I've read about people on about £160k and how much higher their taxes now are than they used to be, the loss of the personal allowance, the loss of child benefit etc etc. No need to cry for them of course but they do pay a higher percentage of their income in tax and take home lower pay and have lost more pay than lower earners.

Of course lower wages should rise

But when you have those at the top and middle top wages rising so quickly it pushes everything out of proportion it unsettles the economy

The mc is a larger percentage of the population now those at the top end earn far more in comparison to what the did this impacts housing while wages at the bottom haven't risen to keep up the growth between those that have a bit more and those that haven't

The separation isn't just about rich and poor it's those in the top middle that wages have increased greatly and only now that group is starting to struggle we are taking notice