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?

The wages of top CEOs is obscene

Don't confuse the private and public sectors

CEO earnings in the private sector are commensurate with company profits

A public sector CEO continues earning regardless of failure

Southern Health NHS Foundation Trust boss Katrina Percy keeps job

They have lost child benefit

Their actual earning have increased as the tax was lowered from 50% to 45% for earnings over £150k

So for someone earning 60k a year that's an extra £500 a year

At the bottom end unless their salary has increased which we know on average there are been very little increase (child benefit and tax credits haven't) they will not have £500 more in their pocket and if they did it would come off next years tax credits as they have earned more they receive less

That should be 160k not 60k

ask average workers to earn more

Spice22

You are not being unreasonable

Bring on the living wage

Bring on the Living Wage

Not as simple as that. First Labour just put up the upper tax rate to 50% (52% including NI ) just for one year before they left power to be spiteful so it was nver a long standing upper rate. Secondly if they are on £160k most of their income was not taxed at the upper rate - in fact probably none as i thin it was the coalition which abolished the single person tax allowance for those on £150k.
Thirdly they have suffered other costs - eg now can only pay £10k a year into a pension and only if they are not up the upper cap and they don't get various child things such as help with childcare costs which other people do.

Eagleisland that's a very interesting point you make.

I do wonder , someone above said that a CEO is not worth 100x a lower worker. Are they not? Just musing here , but surely the CEO has a bigger role in the increasing profits and value of the company ? Which may infant be 100x more than the value that the cleaner brings into the company? For example , Dailyfail speaks about the CEO who brought a billion dollar investment - that's probably worth significant multiples of what a lower earner could bring?

The problem is Spice is that its been conclusively proved that high CEO pay doesn't equate with high performance of the company. In fact long term its linked to short term high risk taking that is bad for the company.

I'm extremely well paid, but I realise that without the lower paid workers who facilitate my role, and my ability to carry it out, I wouldn't be able to earn so much. I fully appreciate that without the things that are paid for out of the public purse I wouldn't be able to carry out my job and neither would millions of others who are well paid.

The pay to executives needs serious overhaul.

The problem is the CEO is accountable to customers, staff and shareholders. Shareholders are interested in profits. Revenues might have shot through the roof and the staff may hope for a good pay rise as a reward for hard work. However, in the accounts their wages are a cost and the other side to revenues of the profit equation. As the CEO knows the shareholders care about profits, pushing down that wage bill may well be still in the (probably short term) interest of profits despite the revenue growth.

The for the benefit of shareholders thing is a misunderstanding these days, the average shareholder own stock for 3 months.

Using this as a reason allows the short termism that led to 2008 and the demise of so many businesses.

Short termism leads to these high salaries because high risk strategies are short term and many CEOs are not in post long enough to see the damage they have inflicted with this.

Lower pay, but longer contracts, with high rewards for long term growth need to be the aim.

Also, the corporate code that sets out that profit to shareholder also sets out that this should be after taking reasonable account of workers, environment etc. This tends to be conveniently forgotten in the argument that a firms only responsibility is to return profit.

Agree about the long term vs short term. CEOs should be rewarded for adding value by things like operational improvement, innovation etc. Not for things like accounting changes which create the impression of improvement.