Exucutive Pay Plan

  morddwyd 07:17 08 Jan 12
Locked

The PM is initiating a drive to "sort out" the market for top people

http://www.bbc.co.uk/news/uk-16458570

Is this not simple Socialism?

Most people seem to think that "something must be done", I'm just a bit surprised, as a dyed in the wool Tory, that it seems to have become party policy!

  wiz-king 08:07 08 Jan 12

Party policy has now become an ephemeral thing that changes at the whim of the media.

So, lets have a maximum wage of 10 time the minimum wage paid to any employee of the same company, and the same tax rate for all. (cat & pigeons grin)

  Forum Editor 08:20 08 Jan 12

"So, lets have a maximum wage of 10 time the minimum wage paid to any employee of the same company"

Followed promptly by a exodus of our top company managers to Europe, South East Asia, and America. Such a policy - or anything like it - would be a disaster for the commercial life of the country.

Far more sensible is the idea - which is the one likely to be adopted if the policy goes ahead - that company shareholders should have a right of veto on top salaries and reward packages.

  morddwyd 08:48 08 Jan 12

Let's not get too far off track here.

The thread is actually meant to be about creeping socialism, not whether boardroom pay is too generous, which only happens to be the example I have chosen!

  Forum Editor 08:59 08 Jan 12

"The thread is actually meant to be about creeping socialism"

But you titled it "Executive pay plan" and linked to a piece about just that.

I hardly think you can describe a scheme to give shareholders some influence over top salaries as 'Creeping Socialism'.

  badgery 09:42 08 Jan 12

FE

The sad, tired old argument about "..we'll all leave and go to Europe etc..." leaves me cold every time I hear it wheeled out to justify obscene remunerations.

It is as if we only have certain people in a company that can 'run' it. There are people all through company hierarchies that are aspiring to 'top jobs' and would be capable of taking over - they are not all going to up-sticks and drag their families all over the world.

Then again, will 'Europe' be as glad to have all these 'refugees' when it's economy is on the verge of disaster as well?

  morddwyd 13:07 08 Jan 12

"a scheme to give shareholders some influence over top salaries as 'Creeping Socialism'."

Come on, FE. I know that you, of all people go not believe the hype there has been over this.

Shareholders have full control over executive salary - they simply go to the AGM and vote people off the board if they think they're not worth their salaries.

The PM simply wants people other than the big institutions, i.e. the rich and powerful, some control over the salaries of other rich and powerful, but also influential, people. Socialism.

This is government by soundbite again. Amazing how much of this stuff comes out just in time for the Andrew Marr show!

My apologies for the injudicious choice of title.

  Forum Editor 13:20 08 Jan 12

badgery

"The sad, tired old argument about "..we'll all leave and go to Europe etc..." leaves me cold every time I hear it wheeled out to justify obscene remunerations"

Yet again we see your habit of inventing what I said, rather than reading what I've written. I made no attempt to justify 'obscene salaries' at all. I simply stated my opinion that the suggestion to limit senior staff salaries to 10 times those of the company's lowest-paid workers would result in senior industry managers going where they could earn more.

As for your comment that "There are people all through company hierarchies that are aspiring to 'top jobs' and would be capable of taking over" perhaps you'll tell me how you are so sure about that. I suspect that - like so many of your pronouncements - it's just something that you feel, rather than know.

  Forum Editor 13:27 08 Jan 12

"Come on, FE. I know that you, of all people go not believe the hype there has been over this."

I'm not sure why you said that. I haven't expressed any belief either way. I simply responded to your "Is this not simple Socialism?" question with an answer - no, it isn't. It's an attempt to throw a bone to those - and there are many of them in the forum - who believe that everything went wrong with our economy because a (relatively) very small number of people have been paid ludicrously high salaries. That's total rubbish of course, but it doesn't stop people believing it.

David Cameron is suggesting that shareholders should have a power of veto on directors' remuneration. I'm quite happy about that, as I said earlier. We'll see what happens. I suspect that Cameron has laid a trap for himself.

  johndrew 13:48 08 Jan 12

Given that for the majority of listed companies the majority of shares are held by such as pension funds and investment companies, it seems unlikely that providing individuals with such a facility as a 'binding vote' will have any effect at all. I find it hard to believe that, say, a pension company headed by an executive probably known to many others in the business world is likely to place a restriction on salary unless something disastrous occurs which can either be demonstrated as a specific personal responsibility and/or inflicting direct damage to that individual.

The world of high finance has long been detached from what the man in the street considers reality and it seems unlikely to me that a direct connection will ever be made. The effects of 'errors' of course are a different matter, demonstrably so.

Whether the proposals made by the PM will ever be practical or applied under the current circumstances seems as unlikely as the rate a jobbing plumber charges to be controlled - now control of that latter may be construed as some form of creeping Socialism!!

  namtas 15:06 08 Jan 12

"Followed promptly by a exodus of our top company managers to Europe, South East Asia, and America. Such a policy - or anything like it - would be a disaster for the commercial life of the country"

Obviously an opinion and one that I have heard put around on a number of occasions from within this forum and outside. I am sure that it is not intended but to some it might be viewed as a form of corporate blackmail. "pay the cost or we threaten to abandon you"

My personal view, let us call the bluff.

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