I’m not going to go into details but David Cameron (the current PM that I also voted for) has started to attack the pay increases in private sector executive pay.
The statistics are there for all of us to see and understand that the pay increases have been huge. After carrying out the research and analysing data, The Institute for Public Policy Research said that the total remuneration of chief executives increased by 33 percent in a year, whereas the average increase in company value was 24 percent.
Ok, agreed. In this situation the pay increase isn’t justified. Why give someone a 33 percent salary increase as a reward when they increased the value of the company by only 24 percent. It is a private business matter that should be left to the shareholders to tackle, and for the company policy makers to investigate. The company has a tough task of finding the right person to run the business, like a general leading an army of old. They need to reward this cunning strategist and jack of all trades to keep him from joining another king who will offer the mercenary general greater rewards for leading him to success.
Remember, the government is attacking a private enterprise here. That’s like me looking through my neighbours window, seeing they run a business from home, seeing everything run efficiently so a profit is turned over. But I have an issue with the pay being offered to the other family members so I go sticking my oar in. Tell the neighbours about it. Whilst I do that they get angry because of what’s happening in this private home, when it’s all legal, why are they getting angry? Because they don’t earn as much as the one that takes more money than the other few invested in this business, one of the guys on my street is unemployed so now he feels an injustice is happening. The local children print flyers and stick them around the street causing a propaganda storm to direct anger at the high earner, distracting the street from the problems that affect them directly. See the angle I played there?
[ever get annoyed at your neighbours?]
Government – excessive spending – recession hit – country in deficit – distraction needed – PM finds PR opportunity to look like the good guy – causes noise – people are angry at increasing unemployment and now they have something to vent their anger about – Champion PM is going to stop this injustice that doesn’t affect me
= people forget the issues.
Speaking with a friend about the issue he gave me a fantastic metaphor which justifies a CEO’s pay. Imagine the business is a group of soldiers at war. They are in a jungle. They need to defeat the opposing army, and they need supplies. The CEO is the leader/general of this group, he instructs his second and third in command (middle managers) who are specialists in areas of their own such as scouting resources and motivating the soldiers to act out their instructions. The second and third in command will climb up trees to gain a better sight of what lays ahead, where the rivers are, where they can rest and what dangers lay ahead. The general climbs up the highest tree as he is a better climber, and he can see further afield and plan out an in depth strategy. He will then give the instructions to the second and third in command and they will give the instructions to the mass army. The battle may not go to plan occasionally and the general will have to adapt the strategy and deploy more resources in areas previously not expected. Ultimately, if the battle is won, the king will reward the general and his troops, if the battle is lost then the general’s head is on the block.
[The legendary battle from 300...strategy was key]
I understand public frustration with businesses and pay at astronomical scales, but if these people are providing the business with increased profits, which ultimately convert to more tax being paid by these businesses. Which ultimately benefit society. It is the government that has taken a socialist stance in recent years and poor spending decisions that are causing more harm to society. The creation of a nanny state.
If the government imposed pay caps on the top performers in any industry, what would stop the world’s best from leaving the UK to find a place of employment in another country that doesn’t do this? It would ultimately harm the UK.
Leave private businesses to budget the pays of their staff, if they are responsible they will want to make as much profit as possible and balance the books. I believe in performance related pay, not just in terms of sales, but what you contribute operationally to the business. The media hype around this, led by Mr Cameron is clearly an attempt to win votes as the country looks likely to be heading into another difficult year financially and now these latest stats are being used as a scavengers reward to gain PR points with the public.
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.next week I should write a song…..
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