Chief Executives' Pay

 In January...Chris O'Shea, the chief executive of Centrica (the owner of British Gas said his £4.5m pay package was "impossible to justify" and "so there's no point in trying to do that."

In 2016, the then CEO of the Co-Op group, Richard Pennycook, sought a 60% cut in his pay package as, he argued, his job had got simpler after a restructuring... These admissions cause embarrassment and are not the story the business elite want to tell. Right now, in fact, pleas for even bigger and better pay packages are being heard in the city.

Julia Hogget, the CEO of the London Stock Exchange, has said that CEOs are getting paid at levels that are "significantly below global benchmarks". She fears an exodus of businesses and executives who feel greater rewards will be found elsewhere, especially in the US, where top CEO's pay is on average about three times the level to be found at FTSE 100 companies. The High Pay Centre reports that, in 2022, the UK's top CEOs were paid an average of £4.4m while the equivalent US figure was then $16.7m (£13.1m)...

Work
Ford Madox Brown (1821-1893)
Photo Credit: Birmingham Museums Trust [Public Domain]

Certainly, Hogget's boss, David Schwimmer, overall head of the London Stock Exchange Group, is worried.

"If London has an ambition to be a globally leading financial centre and to attract world-class companies, that means it has to attract world-class talent," he said recently on the subject of executive pay.

These are the conventional, self-serving arguments we have regularly heard from the highest-paid people. We need top talent, the bosses say - people like me. If you don't pay us enough we will leave to work abroad where we will be paid more...

Alison Taylor from New York University's Stern School of Business writes in a new book Higher Ground: "CEO pay packages keep growing more extreme, even in companies that trumpet corporate social responsibility." And, she adds, while US philanthropic gifts are impressive, "philanthropy is no long-term solution for intractable societal problems such as rising inequality or tax avoidance."...

In "global Britain", we have low pay for the masses, flat productivity, widespread economic inactivity, disenchantment and low morale. And the CEOs' solution? Pay us more! That will fix it.

(Stefan Stern, The Guardian, 2024)

How much does one have to earn in a year in order to be satisfied?