Thursday, December 8, 2011

Bosses pay too high? Then move to Cuba!

A report has suggested that workers representatives should sit on company remuneration committees. But the idea is barking mad and if that’s what you think you should move to Cuba. So said Heather McGregor of executive recruitment firm Taylor Bennett on the BBC.

Deborah Hargreaves
chair of the High Pay Commission
McGregor was on the Today Programme interviewed by John Humphrys on 22nd November, the day the report was released. It’s good knockabout stuff. McGregor says there is no such thing as too much, or too little for that matter, and that the concept of fairness is for 7-year olds. While the High Pay Commission’s Deborah Hargreaves reveals that in the past 30 years we have seen the ratio between company directors and average pay stretch from a multiple of around 13 to over 100.

The background is a year long inquiry into boardroom pay which has found that excessive deals for the UK's top bosses is having a corrosive effect on the economy, for companies as well as society as a whole.

The High Pay Commission was set up by the mildly leftwing think tank Compass. Their report argues that, left unchecked, income inequality will be back at Victorian levels before long. One of the drivers of this is the runaway train of boardroom pay. Despite the financial crisis, executive pay has continued to grow at levels far in excess of inflation.

It's an argument very much in line with The Spirit Level , a must-read book that produces a wealth of evidence that inequality (not merely absolute poverty) causes shorter, unhealthier and unhappier lives, whilst functioning as a driver of consumption and depleting the planet's resources.


Here's a Guardian podcast where Deborah Hargreaves discusses her report with Guardian city editor Jill Treanor.

High Pay Commission

Heather McGregor's company

1 comment:

  1. Your poignant quote from 30th November springs to mind:

    "Find out just what the people will submit to and you have found out the exact amount of injustice and wrong which will be imposed upon them."