Tuesday, 22 November 2011

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

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