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Politics

The myths the realities...

3 replies

ttosca · 15/05/2011 20:16

'Big money is needed to get the best chief executives'

That assumes most are brought in, when 59 per cent of CEOs in the FTSE 100 were already at the company for five or more years.

'Being a CEO is risky, so they need to be compensated'

Hardly. Only six CEOs left FTSE 100 companies in 2009, a turnover rate of 6 per cent, which is less than half the national average.

'Big pay packets are linked to business success'

What about the bumper pay for bankers that caused the crisis? Over the past 10 years, CEO pay has quadrupled while share prices have fallen.

'Big bonuses mean better results'

Not necessarily. Research suggests performance-related pay works 50 per cent of the time ? and bonus culture didn't stop bankers leading us all to crisis.

'Without big pay packets, executives will be lured abroad'

Only one FTSE 100 company has had its chief executive officer poached by a rival in the past five years ? and that was by a rival British firm.

'Our high pay is in line with other leading countries'

It is significantly higher than the rest of Europe ? it is less than in the US, but its CEO pay is 170 per cent higher than the rest of the world.

'Highly paid people at the top boost a company's success'

Having a pay gulf between staff at the top and bottom of a company can damage personal and corporate relations. Just look at how popular bankers are now.

'Top earnings have always risen faster than average wages'

Until 30 years ago, the gap had been decreasing. From 1949 to 1979, the proportion earned by the top 0.1 per cent decreased from 3.5 per cent to 1.3 per cent.

Top earnings rise at the same percentage rate as average pay'

No. The earnings taken by the top 0.1 per cent increased by 64.2 per cent in the past decade, while average pay went up by just 7.2 per cent.

'Attempts to regulate CEO pay would be bad for the economy'

When you pay disproportionately high rewards in one sector ? such as finance ? it is harder to attract good graduates into other vital areas of work.

www.independent.co.uk/news/business/news/exclusive-salaries-for-top-executives-are-rocketing-out-of-control-2284397.html

OP posts:
newwave · 15/05/2011 23:13

Greed will always win out with some of the fetid scum running some companies.

Bankers being a fine example.

jackstarb · 15/05/2011 23:19

Newwave - ttosca's already done this on her 'rich getting richer' thread. More politely than you, I think Smile. But she's not as expert at bolding as you are.

TheCoalitionNeedsYou · 21/05/2011 16:16

And you suggest what solution? This is a problem that needs to be addressed by business owners (I.e. the shareholders) . What you need to regulate us not executive pay, but fund managers conflicts of interest.

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