Director's pay has increased on average by 49% - why does that NOT surprise me?

[Dillydaydreaming]

In the FTSE 100 the biggest companies in the country. It's for the shareholders to put the blocks on big pay-rises and question whether 'performance related' is an appropriate benchmark. In the same day's news, however, a footballer called Tevez is fined a month's wages... £800,000. In a culture happy to pay a man £200,000/week to kick a football, where do you draw the line?

I also thought when I read this.

But I don't pay a licence fee which may contribute to Tevez's wages. I think that's where my line is drawn.

You pay a licence fee to directors of FTSE 100 companies Feenie?...

I've read this wrong, haven't I....it's not BBC directors..

I'll get me coat...

:)

It's clearly not right that executive pay has spiralled out of all control and bears no relation to either performance or the wages of the other employees. It was bad enough when the economy was booming, but it is clearly madness when it's flatlining and the other 97% of the popluation are facing wage cuts, no increase and the public services we rely on are being savaged.

Executive pay is set in a corrupt 'you scratch my back, I'll scratch yours' by non-execs who, surprise surprise, are in turn directors of other companies and stand to benefit from massive wage & bonus & 'incentive' inflation at the top. It's shit and it's bad for society.

The economic crisis has shown that business as usual cannot continue. Sadly those at the top are determined to maintain the bad old system. And so far they are getting away with it, despite all the turmoil. We really do need to tear up the system of exploitative capitalism that has got us into this mix and replace it with a better system, that doesn't incentivise stupid risk-taking or greed. It should create incentives to add real value to companies and society as a whole.

(And it's not just FTSE 100, the IDS research is FTSE 350 as well.)

I think edam sums it up nicely.

You know if the ones at the top don't give in then there's always the solution the French found in 1789.

Shall we guillotine Tevez and his mates in the Premier League as well?... £200k/week presumably bears no relation to the wages earned by the groundstaff or the toilet attendants at the stadium.

Feel free, I can't stand football. I have no idea whether footballers' ridiculous wages bear any relationship to their performance or the performance of their clubs.

Their wages of a footballer are performance-related. If the club gets relegated or they lose form, they get sold on and their price drops. The only people that benefit from a footballer's ridiculous salary will be the local Ferrari garage, their agent and maybe China Whites. If the FTSE 100 company is making a healthy profit & employing thousands either directly or indirectly, why should a talented director not be able to enjoy the fruits of their success the same way?

come off it Cogito, I'm sure you know perfectly well that share prices have not, oddly enough, gone up by 50% in the past year. There is absolutely no relationship between company performance and director's pay - go and look at the data.

Wot Edam said.

Capitalism gorn mad, innit.

PMSL at the idea of directors' pay bein linked to performance. Remind me again what that guy at RBS (?) for? Goodwin? Anyway can't remember.

These people call for taxes to be cut, public services to be cut and employee rights to be cut. They especially call for public sector pensions to be cut (CBI, looking at you) so they can get away with shafting their lower paid employees.

The shareholders are likely old ladies or pension funds who are not likely to turn up to the AGM so in effect the other directors approve the fat salaries.

Cogito,

Your argument does not really work unless we all get to vote our shares. Most shares are held in pension funds or nominee accounts, so we (as ultimate shareholders) never get to vote on board compensation. It strikes me that there is quite a cosy clique of employees (as opposed to owners) continually hiking one another's salaries.

I am very pro capitalism but something is failing when the shareholders are doing disastrously yet the paid managers (most of them hopeless) are becoming very rich indeed.

edam is spot on. The other side of it is that the shareholders in these companies, who theoretically get to vote on the directors remuneration, are financial institutions. And the people who work at those institutions have no idea of what normal pay levels actually are, nor do they care.