|John Varley relaxing between pay increases|
The High Pay Commission has been looking into the touchy subject of executive pay. The commission was set up with charity funding to investigate boardroom pay. Its year-long inquiry found that the pay of top executives at a number of FTSE companies had risen by more than 4,000% on average in the last 30 years. That leaves the minions way down the pecking order. Now one of the top executives selected for the publicity effect was John Varley, erstwhile chief bottlewasher at Barclays Bank. Mr Varley was offered and readily accepted a pay packet stuffed with a cool £4,365,636! Now admittedly he didn't run home with all that. The taxman took 60% of it for sloshing around the general economy. However, it's the thought that he sees his value to Barclays as 169 times more effective as the lowest paid worker.
I'd have thought, now that banks don't have bank managers anymore, just managers of financial shops, that pay should be based on how well the company has been run and not on an expectation that executive pay rises higher and higher each year REGARDLESS of company fortunes.
These remuneration committees should be transparent, above board and totally reflective of the company structure. They should include at least one representative for each of these groups - shareholders, staff, and customers. Yes, customers! Public companies are just that. Publicly quoted with public responsibilities. Far too many are run for the convenience of the bosses who have got there, yes, by merit, but mostly by design.
BSkyB is said to be trying to fight off "a shareholder revolt", so have installed a French executive banker and Martin Gilbert, the boss of Aberdeen Asset Management, to do their bidding. Are shareholders no longer seen as having the right to a say in THEIR company? Aberdeen Asset Management claims on its website to have impeccable corporate social responsibility. "At Aberdeen we strive to do our best for the environment and society as well as our clients, employees and shareholders. Corporate social responsibility (CSR) is a fundamental part of our business ethos at Aberdeen. It forms part of our business strategy, as well as playing a key role in how we operate and manage money around the world." All very well, but is propping up James Murdoch and his seedy doings all part of it?
As I've said on this blog before, I am all in favour of handsome rewards for success. But not largesse for just being there. I had hoped Vince Cable would go through these FTSE firms with a liberal dose of salts, flushing out the corrupt practices and flagrant abuses of shareholders' rights and opinions.
I'm still waiting and hoping.