British soaring salaries

Great economic news. At last.

It seems that salaries are soaring in Britain.

Well, OK, not everyone’s salaries. In fact, I might have to go so far as to admit it’s not even most salaries. To be perfectly honest, it’s only the salaries of the top managers of British businesses that have been soaring.

Still, at least it’s good news that someone’s doing well in harsh times. Isn’t it? And it’s spectacularly well, apparently: an 82% increase in eleven years.

Our best and brightest
Or best paid, at least

Sadly, a new report suggests that these senior executives don’t deserve their remuneration. That the performance of their companies doesn’t justify it. Hard to believe, isn’t it? I mean, what sort of company would pay its executives a salary they haven’t earned? After all, top salaries are mostly set by people who know what they’re doing: top executives from other firms. Whose salaries are set by those whose salaries they set.

How could a system that carefully attuned and balanced go wrong?

I don’t move in such rarefied circles. Over a long and colourful career, I’ve had the privilege, or at least the experience, of working for several fine companies in which I’ve reported to execs a couple of rungs down from those outstanding individuals on their seven-figure salaries. These are the men (all have been men) paid in the low to mid six-figure range (in pounds) – so between 5 and 20 times median earnings, as opposed to 40 times and more.

It has been edifying to see how remarkably they perform. I have, for instance, observed the following admirable leadership techniques.

The Excel Predictor This is a method for forecasting changes in earnings. “Changes” in this context, a prediction, always means growth, unlike a review (swiftly followed by a justification and often redundancies) can mean decline.

The method requires locking an executive or three in a room somewhere with a desktop computer and an Excel spreadsheet. This allows them to calculate just what new sales need to be generated to reach the level of growth they wish to achieve.

I was once asked, seriously, whether it wasn’t reasonable to forecast ten sales of a product with four salesmen.

“That’s less than three each in the year. One every half year and a couple extra. That’s hardly a demanding target, is it?”

“How many sales did we have last year?”

“Two.”

“So you’re looking for a 500% increase?”

But that was nit-picking objection. Two and a half sales each was hardly a massive mountain to climb for experienced salesmen, was it?

We forecast ten sales.

And took one.

The Important Meeting Sometimes executives extend their discussions beyond the claustrophobic circle of three or four gathered around a computer. Indeed, there are some for whom the more important the question, the bigger the meeting. And the longer it lasts.

I’ve sat in meetings of 15 people that lasted the entire day – eight hours. Something in the region of £7000 in costs. The question was how to meet the company’s demand for 30% growth in our division.

We debated how we could win more sales of our existing products. We then discussed what new products we could dream up. We discussed what it would take to build them and sell them. We then discussed all those things over again, three or four more times.

To at least twelve of the people present, it was perfectly clear that the target was unachievable. But the other three were the executives who had foregathered around a computer. They eventually put in a plan based on achieving the desired level of growth.

In the event, the division saw revenue shrink instead of growing. But that wasn’t a problem. Several junior staff were made redundant.

The Gifted Individual There’s no ‘I’ in ‘team’, I’m told. But there’s a big ‘I’ several times over in the ‘Inspired Individual endowed with unique Insight’.

Have you ever had the privilege of working with one of those? No? You don’t know what you’re missing. Just hope that your career will give you the opportunity yet.

These characters are mostly self-taught, but what they’ve learned by applying their Intuition (another ‘I’, you see) to a couple of textbooks they’ve glanced through, enables them to outperform any mere professional with years of experience on top of solid training.

This means that if they win no sales for a couple of years, and the product they champion is bug-ridden and incapable of performing to specification (a fact not entirely unrelated to the sales success), it is entirely due to the ineptitude or downright indolence of their more junior colleagues.

The answer to the problem? A few redundancies among those low performers.

I’m sure the people who stand even further up the hierarchy than these fine executives, are at least as outstanding in their work. It’s therefore beyond me to understand how anyone can think they fail to earn their colossal salaries. These are the men on the pinnacles of our economy – who are we to doubt them?

On the contrary, shouldn’t we be enthusiastically supporting the moves of our present enlightened British government to hand more of the management of our public services over to them?

Perhaps we could pay them a little more for taking on that responsibility.

Brexit: the High Court speaks for the British Constitution

Today, the British High Court decided that the government could not, on its own authority alone, launch the procedure that would take Britain out of the EU.

Lord Thomas of Cwmgiedd, the Lord Chief Justice
presided over the historic hearing

That’s the exercise known as “triggering article 50”, referring to the relevant article of the European Union’s Lisbon Treaty. It states:

Any member state may decide to withdraw from the union in accordance with its own constitutional requirements.

Sounds straightforward. Britain voted for Brexit on 23 June and, despite the regrets of Remain supporters like me, all we have to do now is trigger the article 50 process and go. But, as always, the devil’s in the detail.

The first awkward bit of detail is a problem I’ve mentioned before: just how far out do we go? Do we leave the Single Market? Do we leave the Customs Union? All options have their merits and their disadvantages. They need to be weighed and judged. And the great question is – by whom?

‘By whom’ takes us straight to the second tortuous detail, which is the one that was addressed by the Court today. It’s all about those words “in accordance with its own constitutional requirements”. Just what are those requirements in a nation without a written constitution?

Many of us feel that much of British history has been about the conflict between an executive power originally represented by the monarch and a body that has increasingly come to represent the people, Parliament. All the progress there has been towards freedom, and there’s a lot further to go, has gone hand in hand with increasing the authority of the Legislative power over the Executive.

Now the peculiar characteristics of British power is that this long process has moved executive authority from the Monarch to Ministers who are themselves Members of Parliament. So that ancient tension has now been internalised within Parliament, opposing a powerful minority, the members of the Government, to the majority, all other MPs.

Those of us who would like to see British liberties protected and, ideally, extended are on the side of the Parliamentarians. Unfortunately, a great many people see far more efficiency in action being taken by the Executive untrammelled by such oversight. They particularly favour that approach if they see the government about to take action they like – so, for instance, a lot of Brexiters want Parliament to back off and let the Prime Minister, Theresa May, trigger the exit process herself, on her own authority, without referring the matter to Parliament at all.

In its judgement, the High Court’s view is that this isn’t the right way to go. Brexit is a key decision for the nation. The government should not be able to take it alone. It should, at the very least, obtain Parliament’s assent to it.

The irony is that if the government asks for that approval, it will almost certainly get it. A few MPs will stand up for the Remain cause and vote against triggering Article 50. Far more will see doing so as a defiance of the will of the people expressed in a referendum, which they consider wrong, or at least career-limiting.

David Lammy is a Labour MP who says he would vote against triggering Article 50. But, he claims, the real issue isn’t whether individual MPs vote for or against, it’s that they should have a vote at all. As he says, “it’s about whether you believe in a sovereign parliament.”

David Lammy:
anti-Brexit parliamentarian strong on principle

I do believe in parliamentary sovereignty, so I’m in favour of their getting that vote. That’s a curiously topical matter. Just yesterday, Lord Chilcot, who wrote the damning report on British involvement in the Iraq War, was questioned by MPs. His view was that the problem was caused by the dominating personality of Tony Blair, who drove his government into the war and refused all parliamentary scrutiny. It seems particularly appropriate that the next day a court has ruled that, on an equally crucial issue, parliament must have its say.

The government will appeal the decision, so that might still not happen. My hope is that the Supreme Court upholds the High Court, and Parliament gets to take the decision – even if it goes against me and in favour of Brexit.

So much for the matter of principle. .

At a more pragmatic level, and in the longer run, having Parliament take the decision does suggest that there’s a glimmer of hope for those of us who’d like to remain in the EU. MPs consulted about Brexit may also be consulted about the final Brexit terms. It will be quite a time before negotiations reveal what those terms will be, but when they’re known, Parliament should vote again.

That takes us back to the first point of awkward detail I mentioned earlier. What kind of Brexit is going to be on offer? Many people tell me that Brexit means Brexit and that means getting out of every single European institution. Well, I think if we get that far, the prospect may start to look so utterly appalling that more MPs might feel they can, in conscience, vote against it. So, in order to avoid a disastrous Brexit, they might refuse a Brexit at all.

That’s why, for both principle and pragmatism, I think the High Court’s judgement is the best piece of EU news we’ve had since that sad night of 23 June.

An excellent reason to salute it.