Inflated Salaries...

[CogitoErgoSometimes]

... of £millions/year don't raise an eyebrow when paid to premiership footballers, actors, authors or the stars of TV shows, but are not acceptable for the directors of a successful company. Why?

£m/yr paid to footballers etc do raise my eyebrows. re directors, I think it is the massive (49%) increase in pay that is raising eyebrows at a time when their workforce is having 0 or negative pay increases.

I understand the uproar, of course. But at least the director of a company that is responsible for the successful management of a company, employing thousands of people either directly or indirectly etc., is doing something constructive. A footballer moving clubs and getting a 100% bump in his salary isn't responsible for anyone and the only people benefiting from his wealth will be the local car garage, his agent and maybe China Whites.

I've just been listening to Ed Milliband and Nick Clegg castigating directors for being irresponsible in taking big pay rises when their companies are not producing thousands of extra jobs or contributing to growth. And yet I don't hear them condemning actors, authors, TV personalities or sports stars for doing likewise.

YANBU - but then I don't get why a bonus earned by a banker is bad and should be taxed at 50% (and then have NI taken off it as well) but people who win the lottery deserve every pay and get it tax free...

Don't know about lotteries but is it still the case that you have to pay tax on anything you win at the bookies? (It's been a while since I placed a bet)

dh was talking about this the other day... those evil bankers are back making millions for pensions and yet footballers don't really do anything to benefit people. Yes I know some are involved in charities, but it's all pretty small scale. The wider society doesn't benefit from the inflated salaries of footballers. Certainly the game of football hasn't benefitted either.

Nothing wrong with footballers earning what they do. They are in theory making their clubs more siuccessful and earning their clubs money from attendance revenues and TV revenues.

'I've just been listening to Ed Milliband and Nick Clegg castigating directors for being irresponsible in taking big pay rises when their companies are not producing thousands of extra jobs or contributing to growth. And yet I don't hear them condemning actors, authors, TV personalities or sports stars for doing likewise.'

Can you imagine Ed Miliband castigating Sir Paul McCartney and Bono and JK Rowling? He woulnt do it because they are popular with the public. It wouldn't go down as well with the public as the easy target of faceless directors. It's panto and Ed wants to be popular with the audience.

Footballers deserve every penny they get. Where would you prefer the money went? Into the pockets of the directors?

Exactly JLK2. In the old days, they got paid little and the directors and accountants and club owners took all the money. Now, in a capitalist democracy, the workers (the footballers) are getting a fair return for their labour and the owners (capitalists) have to pay more for their services.

Yes but Claig (and I'm no expert here, this is dh's view point more than mine) aren't the huge wage bills necessary for clubs these days if they are to attract the top players putting up gate prices making it almost impossible to attend games regularly for many fans. And because Sky have much of the broadcasting rights they can't even watch it at home for free but must pay Rupert Murdoch every month. Which perpetuates the cycle.

Cogito, I nearly always agree with you but this time I think Directors have made a mistake. Though I really don't like regulation on business, now I hope boards will be made to get pay passed by their shareholders. It's way out of hand.

Footballers get paid what they do - not ideal, I grant you but hey - but it's the Club Board who is answerable to shareholders many of whom believe these starts are needed. However, most people who own shares in AnyCompany PLC are likely to feel that, no, the international transfer market for Financial Directors isn't going weak at the knees for John Greysuit and that much of his salary could be invested elsewhere.

JK Rowling not relevant to this debate: loaded and deservedly so IMO.

'stars' not starts, sorry

LemonDifficult says what I would say. Isn't there also an issue with directors "waving through" or encouraging their own pay and bonuses at a decision making level, whereas footballers are offered sums and are only offered those sums when they are performing at the top of their game. They're dropped sharpish when they don't live up to their salary.

headfairy, you are right, the huge salaries are needed because of market competition to attract rare talent. The clubs compete and offer money for the players. The players are just workers seeking to maximise their earnings. Nothing wrong with that. The businesses are responsible for paying the wages. It's not the players' fault. The businesses and media often try to blame the players to deflect attention from the businesses.

Yes, ticket prices are going up, but I doubt it is due to players' salaries. Probably just one week's attendance at a stadium would pay for the entire clubs' wages. There is lots of money to be made in football and TV and teh players always get the blame, yet it is the clubs that are really raking it in.

I hate to bring it up again, but I think it is apposite.
We have seen this sort of false apportioning of blame before.

George Osborne gets the blame for cuts, yet it was Labour that left the note saying "sorry, there's no money left".

There was a fascinating interview with WPP CEO on Sky this morning talking about this subject and the guy was so mindblowingly arrogant and unpleasant, my jaw just dropped. I do not think I came across such raw and deep entrenched belief of self-uniqueness and entitlement before and I have been around some really extreme people in my time... that turned me into a fucking commi for the whole duration of the interview.

My old boss (divisional boss rather then the line manager) was an incredible visionary, shrewd businessman and people's manager. He was paid (still is no doubt) millions and I would defend him to the grave, as would most of the people that had the opportunity to work for/with him...

'I do not think I came across such raw and deep entrenched belief of self-uniqueness and entitlement before and I have been around some really extreme people in my time'

Have you read the Guardian?

Nope, I stay well clear of it... I respect my BP.

A very wise decision

BMbb - you are right that people who get to the top of their game do often delude themselves that they are 'worth it' because no one else could do it as well. In football, the world is watching and we can compare goal of the season etc, etc, in business comparisons are a lot murkier. Everyone knows people who are overpaid because their work isn't transparently analysed. The shareholders WILL analyse this, and I'm sure that they will think that their Director of Communications can probably struggle by on £350K rather than £700K.

I'm right of centre but believe there is some grounds for having a limit to the multiple applied to executive salaries, for example, you can't earn more than seven times the salary of the lowest, or in some cases, average, paid employee. It's the huge range between the very top earners and the lowest that is so bad for our society. Research has shown that everyone is actually happier and more secure where there aren't such big gaps.

there is a very clear divide between footballers/JK Rowling and directors.

Directors are fiduciaries, in a position of trust, there is a code to how they should behave. They obviously owe a duty of care to the shareholders. The duty of care they owe to other stakeholders is definitely worthy of debate, imo.

Footballers get bonuses depending on their performance. They don't get a bonus for being relegated. Film Directors pay is likely to include a % of the box office profits. Company Chairmen and Chief Execs get huge amounts when their companies are not performing well and profits and share prices are declining. And if you want to get rid of them for underperforming they get huge payoffs.

Managers of companies get high wages while those on the ground get very little, thus the management is getting rich off the back of the workforce.

Actors, musicians etc are paid for a product, they sell a lot of albums/tickets or are seen to attract viewers that pushes up advertisement revenue, the same thing goes for sportsmen, it's tickets and advertisement for products, no one is making you buy Nike trainers but is it Beckhams fault the boss is a millionaire while those making the shoes get fuck all? no.

You can't compare them at all.

I'm not exactly arguing in favour of inflated salaries for directors. What I'm arguing for is some consistency. If what we don't like is 'unbridled wealth' then let's criticise the massively wealthy equally, however they earn their money. If we don't like people amassing personal wealth when they don't contribute to economic growth or reduce unemployment, let's apply that standard across the piece. By singling out directors for the criticism and letting rich TV stars etc., carry on regardless (and I don't suppose the board members of premiership teams are going around in sack cloth and ashes any more than their top players) we're operating double standards. That's my complaint.

I don't think many people have a problem with 'unbridled wealth', though, do they, cogito?

I think what people have a problem with is undeserved wealth, being stolen effectively from those at the bottom of companies by those at the top, just because they can.

People who genuinely create wealth like entrepreneurs or authors are entitled to every penny. The problems with these company directors is that in many cases they are not personally responsible for any increase in wealth; they are just managers, and even when they utterly fail to manage the companies successfully, they receive amazing pay offs. It is the lack of link between their pay and both their performance and their staff's pay that is the problem. If the company is doing well, the rewards should be shared; if the company is doing badly, it is not right that the workers are made redundant whilst the boss receives a rise.