FTSE directors taking 100x the average wage is just too much, for most of them.
Thankfully, Britain is a pretty stable place to live. It’s one of the benefits of the endemic hereditary privilege that defines this country. Its symbol is the Royal Family, and the continued dominance of Old Etonians as our leaders underlines the concept. In a very real sense who we are is, and has been for many generations, a question of birthright. The British seem to like deference.
Of course, some generations have been more socially mobile than others. From time to time spreading the rewards around a bit helps to maintain social cohesion. Social stability is something we all want, the problem is that sometimes the old guard are just too reluctant to let go of power. It’s a bit of game really and this generation seem to have forgotten the rules. Everyone can vote, but isn’t it now time ordinary folk got more of a say in how businesses are run and how, if they succeed, the rewards are distributed?
Vince Cable has said, forced primarily to do something about this by the 49% increase in the pay of FTSE 100 directors last year and the global discontent with greed, that he wants to take executive directors off remuneration committees at listed companies. He wants to replace them with people from the professional services, more senior civil servants, journalists or lawyers.
Vince, these are all the same people, they just wear different hats. What about the Third Estate, the workers? Average pay of FTSE 100 directors was £2.7m last year, about 100 times the average wage. Some of these guys and gals deserve it, many don’t, just look around at the mess some of the biggest businesses in this country are in currently.
To create a more equitable society we need to bring the gap between the highest and lowest paid in our big corporations down to more like 50x over time and that isn’t going to happen by shuffling the chairs in the institution, you actually need more radical change.
Isn’t it about time there was a more balanced conversation and that involved us all not just the people traditionally in control?