A View From Middle England - Conservative with a slight libertarian touch - For Christian charity and traditional belief - Free Enterprise NOT Covert Corporatism

Friday, November 25, 2011

Sainsbury's boss Justin King says top pay out of control

All the fun of the unfair!
Britain is running two economies it seems to me. The good well-structured, well-managed one and the one run by dirty rotten scoundrels. Justin King is the chief executive of Sainsbury's. He came into the business when it was in a tail spin and turned it around and has made a success of it. He gets a salary of £900,000 for being in charge of the company. Considering he has the responsibilities he has, I don't think this outlandish in the commercial world. He said on BBC Question Time last night that pay is out of control in some organisations because there is no transparent link between pay and performance. He went on to say that those running companies need to start listening to those who see 'something rotten' about the pay for those at the top.

Something rotten? The good economy cannot continue to be the last chance saloon for the bad economy. These saloons all have the same name. "Bailout Bonanza!". Utterly hopeless to continue as such. I applaud Justin King for standing up and saying such things. These bosses carrying away cash bonuses for mediocre performance are sheer hypocrites. They'd sack their staff if such antics occurred in the lower levels of the business. How come they are immune?

Shareholders need to get a grip and get these laggard leaders into line. If they won't, then Vince Cable needs to legislate so that remuneration committees are seen as above board and not cosy cabals of self-serving bonus grabbers all filling their pots as if in a sushi restaurant.


Here's a story from the United States that might depress you even more.

Lockheed Martin is a leading defense and other government contractor. Without that money, they would have a very difficult time staying in business -- at least at their present size. They pay their CEO about $20,000,000/year.

I've known one of their engineers for some time via space exploration connections. He's 56. He worked for Lockheed Martin for 32 years. He's now been forced into early retirement because they don't have any work that fits his skill set at present. He can't collect Social Security until he is 62. But, hey, Lockheed Martin managed to increase profits last quarter. That's all that matters.

People in U.S. tech companies have been whining for years that they can't get young people to work for them. They don't want to hear it is a management problem along the lines of the example I just used.

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