Executive pay up 4,000%, average pay three times what it was...

[edam]

executive pay spiralling out of control. Anyone think they can defend this?

It is appallingly ininquitous. I don't know how anyone can defend this.

oh. my. god.

thanks for posting this edam

We are all in tbhis together innit?

I was particularly appalled by the "aw shucks" attitude of the man defending these levels of pay, and the argument that "if we don't pay them that, someone else will, and we'll lose them". Nothing about tackling the global problem of excessive pay or anything.
How divorced from real life would you have to be to think "this job only pays £3m, I'll have to look at jobs outside the UK"

One of my friend works as counter staff in abank and earns just over £13 K and her CEO got £3.5 million. Not very equitable is it? I think NMW is sometimes used as an excuse to keep pay low - shw works hard and does a good job surely she is worth more?

Utterly repellant.

It is completley and utterly out of control. It has nothing at all to do with attracting talent or incentivising people.

I am sick to death of hearing the old excuse trotted out that it is about attracting the right talent. Executive pay it is out of control because the members of the Remuneration committees in the top firms often sit on each others boards. Pay consultants never recommend reductions in pay and investing institutions are wary of saying anything about the issue because their own top executives are earning similar amounts. Politicians often retire form politics and go and sit on Boards. There is almost no one in power who is willing to tackle this issue.

As an investor, I know full well the FTSE 100 is at exactly the same level as it was ten years YET the pay of the people that run the companies I invest in has spiralled out of control. I always vote my shares against excessive executive pay packages (as do many small private shareholders) but small shareholders are overwhelmed by the block vote of institutions that always pushes the packages through. Mostly the investing institutions dont even bother to vote - they just abstain and allow the Chairman of the Board to vote their shares whichever way he believes is right.

Don't get me wrong. There are some good executives running great companies out there that thoroughly deserve their high pay. I am perfectly happy to pay people a lot of money who do a good job. The majority of large firms are just very average though and more or less run themselves. Their executives add very little.

I'd like to see a cap brought in that says the highest earner in a company cannot earn, for example, more than 25x more than the lowest paid. It would still provide a massive salary for execs but stop the utterly Indian pay rates that exist at the moment. And if they want to earn more they'll have to put up the lowest earners salaries too.

insane stupid auto correct!

PinkCanary - actually 'Indian' is a very apt way of describing the current situation.

In Developing and Emerging Market countries like India, the gap between the richest and poorest is very extreme. In India, you have people who are slaves and you have people who have Western standards of living.

That gap between the richest and poorest is measured by what economists call the Gini Coefficient. As well as being an economic measure of inequality, the Gini Coefficient is also a measure of social tension in a country.

The Arab Spring revolutions this year have very much been sparked not just by a desire for political change but also a sense of deep disatisfaction about income and wealth inequality between the stratospherically rich elite and the mass of people living in grinding poverty.

The USA has the highest Gini Coefficient in the Western World and the UK Gini has bene climbing rapidly in recent years. It is therefore not surprising that there is disquiet and 'Occupy london/Wall Street' protests as already rich bankers get bailed out and executive pay spirals ever upwards even as the majority of people face job losses and wage freezes. Countries like Sweden and Norway have much lower Gini Coefficients and have a reputation for social cohesion and income equality.

That's an interesting measure, morebeta.

One of the things that really irritates me about this is that the large instititions that wave these things through on the nod are ultimately using our money - it's our pension funds and insurance pots. They should be accountable to savers, instead of using our money to prop up a corrupt system.

jeezus holy christ - this is sick. Greedy f*kers - and it will be these baaastards who'll accuse the strikers next week of being greedy. String em up.

This is another reason I got my tent and spend most of every week at Occupy London :(

Completely and utterly wrong - the ugliest face of capitalism.

We should all be revolting. I'm not sure how long we can put up with this inequality as a society before we all get REALLY FUCKING ANGRY and do something.

I have got more and more frothy over the last year.

The High Pay Commission was set up by pressure group Compass....

Ok, so in other words this report was a foregone conclusion before it even started. It's a bit like asking Cancer Research to write a report as to whether smoking causes cancer.

Exec pay is ridiculous. But then so are footballers. In a global world, the only way to tackle this is for governments to work together. And let's face it, that's never going to happen in our lifetime.

At the end of the day, exec pay is set by shareholders. The owners of the company. And arguably it's one of our business as long as the owner is happy to pay stupid money to someone.

And don't forget that most of the 'shareholders' are the very institutions we're relying on to invest our money to one day, pay our pensions and underwrite our insurance policies.

At the end of the day, that money comes from the surplus value produced by workers (or do you think it just grows on trees Niceguy?). That is why this is obscene and it is totally my and everyone else's business what happens to that money.

Is it though Telsa? So why do you feel it's any of your business how much money that the chief exec of say.....Vodafone...or Tesco? Other than maybe being one of their customers, in which case you can easily protest by refusing to be their customer, for what reason do you think it's "your business"?

Do you own shares in the company? Do you work for the company? Chances are no.

I'm not saying the salaries are not obscene. I think Rooney is incredibly overpaid to kick a football around and sleep with prostitutes but hey...it's none of my business.

The problem is that by letting others who are completely uninvolved and have no skin in the game, have a say, it's a slippery slope in a free market economy. You only have to read AIBU and it often seems anyone who pays the higher rate of tax is a rich toff who deserves no sympathy. Do i really want people like that setting the pay for the chief exec of Tesco? Probably not.

niceguy, there is quite a bit of evidence to suggest that societies with very high differentiation in incomes develop problems which affect the whole of society: they tend to be higher in crime and disaffection and health problems

since we all have to live in the same society, I would suggest we all do have an interest in how that society looks

as somebody who lives comfortably on her income and gets to do an interesting job I don't really care personally if manager x gets paid 500 times as much for his job- if all that meant was that manager x has 500 times as much money as me

but I am not a hermit: if the result of growing inequality is a lack of societal cohesion and a growth of tension, then I do care because it is going to affect me too

and if the workers of x's company have to be paid less or threatened with redundancy to make up enough surplus to pay x then I think any decent person can be entitled to care about that

Hmm, I've got a problem with this. Let's first of all start with a whopping assumption. Let's assume that salary is the only method of remuneration for top earners. There can be no share options, dividend payouts etc...

Now, if you cap the level of reward for top earners as being (for example) 50 times the annual salary of the lowest paid in the company, you end up creating a flat rate for our top bods which will be 50 x the minimum wage.

Minimum wage is currently £6.08 so (assuming a 40 hour week, 52 week year) such a proposal would cap top directors pay at £632,320. Fair enough you might think. It would certainly be a comfortable living standard.

There are a couple of downsides though. Firstly, any large organisation which employs people on minimum wage would be allowed to pay their directors no more that £632,320. The head honcho of successful companies which are booming (I'm thinking of the boss of Tesco?s here) will now be capped at the same rate as the guy in charge of a failing company (think Woolworths).

There would be no opportunity for a failing company to recruit a better, more experienced CEO. There would be a brain drain to companies in territories not covered by this law. There would also be a shortfall in the amounts of Income Tax raised, leading to tax rises elsewhere in the economy.

There is, however, an alternative, a simple and democratic solution to this problem that requires no laws to be passed and no parliament time. Go out and buy a couple of shares in whatever company gives you the hump. Make a point of turning up at the shareholders AGM and make your feelings heard. If enough people agree with you the company will have to reduce the pay of its top earners.

Some good points MrPants.

And this is before you consider that chances are, Mr CEO of Tesco's isn't directly employed by Tesco. Chances are he has a personal service company which has the contract. That means that Tesco pays this little company which is owned by the CEO and he can avoid paying the full whack of tax. Just in the same way that your average premiership footballer's won't be paying 50% of their income in tax.

So this means if you cap the maximum pay, you wouldn't even touch the people you want since legally Tesco is paying another company who would then award the shareholder's (ie. the CEO) a large dividend which isn't counted as a salary.

Or worse still, said high flying CEO would base himself out of another country thus depriving the UK treasury of all his income.

You'll see the MP's moan & groan a bit to tap into public sentiment but i bet you nothing will really happen. Mr Cable's promise to look at the proposal's "seriously" is the MP's way of saying "I promise I won't laugh whilst reading it and shortly before chucking it into the bin"

Grrr. How about the people whose pensions and ISAs are invested in the shares of these companies actually get a vote on executive rather than it just going to the pension/investment company as a 'block'.

Bramshott Now that's not a bad idea at all...

Sorry, missing word - should have said "executive PAY" clearly.