Traditional triumph in the board room

It seems that top executive pay in Britain rose by 11% last year, while on average pay packets rose by only 1.7%. That 1.7% is a pay cut in real terms since it isn’t enough to cover inflation.

In 2016 it would have taken a worker on the median wage 157 years to earn as much as a top executive would pick up in a year. There has been progress since those dark days, however. In 2017 the figure had risen to 163 years.

It’s not for me to suggest that a top director isn’t worth 163 times any ordinary person. So I’ll leave it to someone much closer to all these matters. The Guardian quoted Andrew Ninian from the Investment Association, a body representing Fund Managers, not generally amongst the lowest paid themselves:

Investors have repeatedly highlighted their concerns with excessive CEO pay, so it is frustrating that the message does not appear to be getting through to some FTSE 100 boardrooms. This year we have seen more FTSE 100 companies get significant votes against their remuneration reports than in previous years.

So even though shareholders have been voting against these colossal increases, they go through anyway.

If shareholders can’t stop them and executives, who benefit from them, won’t, then who could? 

Government maybe.

Sadly, though Theresa May spoke out loudly for executive pay moderation while she was campaigning for election, she’s been back-pedalling hard ever since becoming PM again. She has, for instance, dropped the proposal to put worker representatives on boards.

So there’s no prospect of any slowing in the drive for ever-higher boardroom pay any time soon. Something that people who backed Brexit ought to think about. You wanted control brought back home? Just look who you’re handing it to.

Not that there’s anything new about any of this. Following my mother’s recent death, I have a huge quantity of photos and correspondence to go through, and even a few books (we gave most away but I kept some). One was a collection of cartoons by the American Peter Arno from the 1940s. I happened to be glancing through it today and came across this one.

‘The motion has been made and seconded that we give
ourselves a raise in salary. All those in favour say “Aye”.’

It seems that the triumph of the board room is by no means unique to our times or indeed to Britain. A tradition honoured by time, you might say.

After all, there’s very little else to honour it, is there?