Macron Wants Cap on ‘Shocking and Excessive’ Executive Pay

THE GUARDIAN: In run-up to the presidential vote, French premier calls for EU-wide ceiling after head of carmaker Stellantis receives €19m

Emmanuel Macron says ‘society will explode’ if CEO salaries are not kept in check in France where executive pay has become a prominent election issue. Photograph: Christophe Petit-Tesson/EPA
Emmanuel Macron will push for a cap on excessive executive pay should he be re-elected president after he described as “shocking and excessive” the €19m (£15.7m) pay packet handed to the head of carmaker Stellantis.

Macron, who is campaigning in the run-up to the final vote for the French presidency on 24 April against far-right candidate Marine Le Pen, told France Info radio that he was in favour of an EU-wide ceiling for top executives’ pay.

The multimillion-pound payout handed last year to chief executive Carlos Tavares, when French carmaker PSA merged with Italian-US rival Fiat Chrysler to form Stellantis, one of the world’s largest carmakers, has emerged as a prominent issue in the election.

Macron and Le Pen are attempting to woo the 7.7 million people who voted in the first round for left-wing candidate Jean-Luc Mélenchon, who has described the final run-off as “a choice between two evils”. » | Phillip Inman | Friday, April 15, 2022

'Fat Cat' Backlash: Swiss Executive Pay Debate Gets Ugly

SPIEGEL ONLINE INTERNATIONAL: Switzerland votes this weekend on whether to limit executives' pay at twelve times that of their lowest-paid worker. In the run up to the referendum, the issue has become a national talking point, with both sides stoking public resentments and fears.

In Switzerland's current, polarized debate about executive salaries, Bern businesswoman Pia Tschannen could be considered a defector -- a woman in cahoots with the Young Socialists, the Social Democrats and the trade unions -- because she is campaigning for the 1:12 initiative, which is being put to referendum on Sunday.

The initiative's aim is to ensure managers cannot earn more in a month than a normal employee earns in a year. It would mean that nobody would be able to earn much more than 500,000 Swiss francs (€400,000) annually. "Ever higher salaries for managers imply that a company's success depends solely on one person. I don't believe that," says Tschannen.

In comparison, board members at Commerzbank, Germany's second biggest bank, were outraged at the government's insistence their pay be limited to €500,000 when the bank was bailed out with government money. Given Switzerland's historical association with Calvinism -- which is supportive of economic success -- the campaign has gathered surprisingly widespread support beyond the traditional left-wing. For a while, polls suggested advocates of the initiative were in a dead heat with their rivals, though support has now dropped. War on the 'Fat Cats' » | Christian Teevs | Friday, November 22, 2013

Inside Story: Curbing Europe's Bank Bonuses
European officials have struck a deal that could radically change the banking industry's bonus culture. Hazem Sika, discusses with guests: Alessio Rastani, a trader and founder of the leading trader dot com; Birgitte Andersen, director of the Big Innovation Centre. Birgitte is an economist specialising in innovation and EU policy; and Peter Schiff, CEO of Euro Pacific Capital, an American investment broker and author of several books on the financial crisis.

Swiss Referendum Backs Executive Pay Curbs
BBC: Swiss voters have overwhelmingly backed proposals to impose some of the world's strictest controls on executive pay, final referendum results show.

Nearly 68% of the voters supported plans to give shareholders a veto on compensation and ban big payouts for new and departing managers.

Business groups argued the proposals would damage Swiss competitiveness.

But analysts say ordinary Swiss are concerned about a growing economic divide in the country.

The vote came just days after the EU approved measures to cap bankers bonuses.

'Fat cat initiative'

The final results showed that all 26 Swiss cantons backed the proposals.

In all, 1.6 million voters said "Yes" against 762,000, who rejected the idea.

The BBC's Imogen Foulkes, in Berne, says multibillion dollar losses by Swiss banking giant UBS, and thousands of redundancies at pharmaceutical company Novartis, have caused anger in Switzerland - because high salaries and bonuses for managers continued unchanged.

The new measures will give Switzerland some of the world's strictest corporate rules, our correspondent adds. » | Sunday, March 03, 2013

From Tottenham to Tennessee, Capitalism Is Destroying Politics
THE DAILY TELEGRAPH: Democracy is at stake unless the huge and growing pay gulf between the very rich and ordinary workers can be narrowed.

Tottenham Jobcentre Plus is shut. Boards mask its charred frontage, and a notice screwed to the door announces that the building “has closed due to fire damage and will remain closed until further notice”. Clients are directed to a government website or to a “Temporary Service Arrangements fact sheet”. There is no guidance on how that document might be procured.

In a country with more than a million unemployed 16- to 24-year-olds, this centre, just down the road from where the riots of 2011 began, stands as a monument to dole-queue Britain. A young man with a toddler in his arms hovers outside. He has just arrived from Ghana with an HND in marketing, he says, and he needs a National Insurance number in order to find a job. Someone told him he should start here. They were wrong.

In the borough of Haringey, which includes Tottenham, the percentage of citizens claiming Jobseekers’ Allowance is 6.7, against a national average of 3.8. A contrasting portrait of a Britain whose Midas touch eludes sinking communities is revealed today as the independent High Pay Commission publishes the results of a year-long inquiry into corporate excess.

It reports that, in the past three decades, top executives have awarded themselves increases of more than 4,000 per cent, with the chief executive of Barclays earning £4,365,636, or 169 times more than the average worker. The chief executive of Lloyds, one of the banks bailed out by the taxpayer, gets £2,572,000, which represents a 3,141 per cent hike over the same period.

The top 0.1 per cent of British earners are not only as rich as Croesus, the Lydian king synonymous with great wealth. Most are, by virtue of that fortune, citizens of another country. This realm, dubbed “Richistan” by the American writer Robert Frank, is home to a global elite whose US branch earned more by 2004 than the entire take-home pay of Canada. » | Mary Riddell | Monday, November 21, 2011

My comment:

This is all going to end in communism if nothing serious and meaningful is done about it. Ordinary folk will NOT tolerate this forever more. History shows this to be so. The riots in London which shocked us all will look like a picnic in the park if things go on as they are. This is NOT capitalism! This is a malignant deviation from it. Capitalism isn't working; and nor is democracy. The end of all this will not be a pretty sight. It's five to midnight. The end is nigh. – © Mark

This comment also appears here.

High Pay Commission: Most People Believe Executive Pay 'Out of Control'

THE DAILY TELEGRAPH: Most people believe pay and bonuses for top executives are ''out of control'', according to a new study to coincide with a report which describes excessive high pay as ''corrosive'' to the economy.

A year-long inquiry by the High Pay Commission finds the pay of some top executives has soared by more than 4,000 per cent in the last 30 years, undermining productivity and ''damaging'' trust in British business.

The report criticised ''stratospheric'' pay increases which have seen wealth flow upwards to the top 0.1 per cent of people in the UK.

Average wages in the UK today are a ''modest'' £25,900 - up from £6,474 in 1980 - a three-fold increase.

The commission called for a number of reforms, including a ''radical simplification'' of executive pay, putting employees on remuneration committees, publishing the top 10 executive pay packages more widely, forcing companies to publish a pay ratio between the highest paid executive and the company median, and making firms reveal the total pay figure earned by executives.

The commission also said a new national body to monitor high pay should be established.

The report, Cheques With Balances: Why Tackling High Pay Is In The National Interest, showed that decisions to award huge pay packages are set by a ''closed shop'', shrouded in highly complex detail, effectively hidden from shareholders, staff and the public.

''Stratospheric increases in pay are damaging the UK economy - distorting markets, draining talent from key sectors and rewarding failure. Read on and comment » | Tuesday, November 22, 2011

My comment:

This is NOT capitalism! Capitalism rewards risk-takers. What risks do these executives take? They are in secure positions, and are rewarded with monopoly-figure salaries and bonuses even if they achieve little or nothing. This is unfair, corrosive, and a disincentive for others to take any risks or make any effort to better themselves. Faced with this scenario, why should anyone bother to make the effort to pull himself up by the bootstraps? This is a total disincentive to effort. And that's a very destructive situation for a capitalist economy to be in.

Further, it cannot be overemphasised that societies with such inequalities of wealth are a breeding ground for socialism, and even for communism. If you think that socialist/communist revolutions cannot happen in this day and age, and in this country, think again! Now do we really want to continue with this breeding ground for such a scenario? I think not. It is therefore high time to turn the screws on these obscene, vulgar fat cats. Tax them, until the pips squeak if necessary. The alternative scenario might well not be a pretty sight. – © Mark

This comment also appears here.

Exclusive: Salaries for Top Executives Are Rocketing 'Out of Control'
THE INDEPENDENT: A new investigation shows pay inequality is accelerating in Britain, with top bosses set to earn 215 times the average wage by 2020. It also demolishes the arguments they put forward to support their astonishing incomes

Britain's bosses are pocketing an increasing portion of the nation's income, according to a report from the High Pay Commission to be published tomorrow. As the majority of people in the country face the largest drop in household income for three decades, a tiny minority at the top are awarding themselves a growing slice of the UK's wealth.

The top one thousandth of the British working population currently receives 5 per cent of the country's earnings, a ratio equivalent to that in the 1940s, the report says. If these trends continue, income for the highest paid will account for 14 per cent of the country's total by 2030 – the same proportion as in 1900.

The independent commission was set up in November to scrutinise the rising pay of those at the top. Its first report concludes that during the decade Labour was in power, income at the top grew by 64.2 per cent, while that of an average earner increased by 7.2 per cent over the same period.

The study accuses businesses and governments of having "failed to tackle the dramatic growth in pay at the top" despite growing public anger at the gulf between soaring rewards for executives and tightening circumstances for the rest of the country.

The conclusions will be a blow to David Cameron's attempts to emphasise that "we're all in this together". The Government has appeared flat-footed in its attempts to persuade senior executives and bankers to curb the pay and bonuses they award themselves, particularly as the effects of the recession are still being keenly felt by the rest of the country. » | Emily Dugan | Sunday, May 15, 2011

Let's Make CEOs Justify Their Wages
THE GUARDIAN: If business leaders had to explain why they are worth their extravagant salaries, we might see an end to corrosive inequality

When an economy is booming, unjustifiable inequalities in pay can easily escape our attention. In these straitened times, with big cuts in public services about to hit the most vulnerable, it is time to look more carefully at how work is rewarded in our society. We need to realise that recognising the significance of incentives should not lead to acceptance of the daylight robbery that passes for executive compensation today. A good place to start is by looking at corporate governance.

The facts about income inequality in the UK are nothing less than mind-boggling. The average income of a FTSE 100 chief executive, according to the most recent Guardian survey of executive pay, is over £3m per year, including bonuses and pension contributions. This is more than 100 times median household income. It is not uncommon for CEOs to run 200 or 300 times as much as the median pay of their employees or, in the case of Terry Leahy's final year at Tesco, for a CEO to be paid 500 times the average take-home pay of his colleagues.

Moreover, executive pay continues to march relentlessly upwards, unconnected to skill, judgment or underlying profitability. While the FTSE lost a third of its value in the year to September 2009, executive pay rose 10% during the same period. According to the Work Foundation, the ratio of average CEO pay to average UK earnings rose from 10:1 in 1980 to 75:1 in 2006 (and has continued to grow since). In short, the gains of economic growth are becoming increasingly concentrated in a small number of hands, while the wages of ordinary people have stagnated.

Should we care? New Labour's answer, famously encapsulated by Peter Mandelson, is that we should be "intensely relaxed about people getting filthy rich". Looking at runaway top-pay with a clear eye on its social and political consequences, Mandelson's claim looks as short-sighted as it is wrong-headed. Read on and comment >>> Martin O’Neill | Tuesday, October 19, 2010

Whatever happened to conscience? No responsible chief executive would feel good about siphoning off the cream for himself and leaving the worker bees with the crumbs. But these days, it seems that 'responsible' and 'CEO' are mutually exclusive concepts.

Taken to the extreme, this situation could eventually lead to revolution. History shows this to be so. Revolutions occur where extreme wealth and extreme poverty collide. The British are very complacent people, especially by comparison with the French, who have currently taken to the streets. But even a worm will turn. The élite shouldn't push their luck. – © Mark

This comment also appeared here

Executive Pay 'Up 10 Per Cent Despite Crash'
THE INDEPENDENT: The pay of executives at the helm of Britain's top companies rose 10 per cent last year despite their organisations suffering huge losses on the stock market, it emerged today.
The full and part-time directors of the FTSE 100 companies took home more than £1bn between them last year, according to The Guardian's annual survey of boardroom pay.

The directors' salary increases were more than three times the 3.1 per cent average pay rise for ordinary workers in the private sector and more than double the rate of inflation last year.

Their bumper pay hikes came at a time when many of their companies were imposing pay freezes and redundancies on staff in a bid to cut costs.

The survey also revealed that the 10 most highly paid executives together earned £170m last year - up from £140m in 2007.

Liberal Democrat Treasury spokesman Vince Cable said: "The Guardian's analysis shows the breathtaking cynicism involved in a lot of executive pay deals, which are unrelated to either personal or corporate performance and involve people who are very well off helping themselves to larger salaries when private sector wages in many companies are being cut."

The increases in executives' basic pay helped compensate for falls in bonuses related to the performance of their companies.
Overall pay for directors of FTSE companies, including bonuses, fell by an average of 5 per cent, with the average chief executive of a bluechip company now earning a basic salary of £791,000.

But taking into account bonus payments, share awards and the value of perks ranging from cars and drivers to school fees and dental work, the average pay package rises dramatically, the newspaper said.

Nearly a quarter of FTSE chief executives received total 2008 pay packages worth more than £5m, and 22 directors now have basic salaries of more than £1m. >>> Rosamond Hutt, Press Association | Monday, September 14, 2009

Executive Pay Keeps Rising, Guardian Survey Finds
THE GUARDIAN: Full and part-time directors of FTSE 100 shared between them more than £1bn

Bart Becht, the chief executive of Reckitt Benckiser, was rewarded with £36.8m in pay, bonuses, perks and share incentive schemes. Photo: The Guardian
Executives at Britain's top companies saw their basic salaries leap 10% last year, despite the onset of the worst global recession in decades, in which their companies lost almost a third of their value amid a record decline in the FTSE.

The Guardian's annual survey of boardroom pay reveals that the full- and part-time directors of the FTSE 100, the premier league of British business, shared between them more than £1bn.

Bonus payouts were lower, but the basic salary hikes were more than three times the 3.1% average pay rise for ordinary workers in the private sector. The big rise in directors' basic pay – more than double the rate of inflation last year – came as many of their companies were imposing pay freezes on staff and starting huge redundancy programmes to slash costs.

The Guardian data also shows that a coterie of elite bosses at the helm of multinational corporations are seeing their overall pay packets soar ever higher. The 10 most highly paid executives earned a combined £170m last year – up from £140m in 2007. Five years ago, the top 10 banked some £70m.

The Liberal Democrat Treasury spokesman, Vince Cable, said: "The Guardian's analysis shows the breathtaking cynicism involved in a lot of executive pay deals, which are unrelated to either personal or corporate performance and involve people who are very well off helping themselves to larger salaries when private sector wages in many companies are being cut." >>> Julia Finch and Simon Bowers | Monday, September 14, 2009

Terry Semel, Yahoo!’s ‘Eased Out’ Chief Executive, Made $71.7 Million in Pay and Benefits in 2006 Despite Company’s Poor Performance
TIMESONLINE: Terry Semel, the embattled chief executive of Yahoo!, resigned last night amid widespread pressure from investors over his lavish pay package despite a 35 per cent drop in the group’s share price.

In a statement yesterday, Mr Semel said that he had told Yahoo’s board that it was “my desire to take a step back sooner rather than later”.

“This is the time for new executive leadership, with different skills and strengths, to step in and drive the company to realise its full potential. It is the right thing to do, and the right time is now,” he said.

Mr Semel, 64, will stay on at the California-based internet company as a nonexecutive chairman. Yahoo! chief quits after pressure by shareholders (more) By Tom Bawden and Siobhan Kennedy

Mark Alexander

The Pay Gap Widens; Top Executives Paid More Than Ever
NEW YORK TIMES: Like most companies, Office Depot has long made sure that its chief executive was the highest-paid employee. Ten years ago, the $2.2 million pay package of its chief was more than double that of his No. 2. The fifth-ranked executive received less than one-third.

But the incentive for reaching the very top of the company is now far greater. Steve Odland, who runs Office Depot today, made almost $12 million last year, more than four times the compensation of the second-highest-paid executive and over six times that of the fifth-ranking executive in the current hierarchy.

As executive pay has surged in most American companies, attention has focused on the growing gap between the earnings of top executives and the average wage of workers in cubicles or on the shop floor. Little noticed, though, is how much the gap has also widened between the summit and the next few echelons down. More Than Ever, It Pays to Be the Top Executive (more)

FINACIAL TIMES:
Tycoon to 'fight on' after £48m ruling

Mark Alexander