There are some things I like about David Cameron. He’s such a passionate bloke, articulate as hell, quick on his feet, and he doesn’t give in to bullies. Nothing stiff upper lip about him. He looks as if he’s having a ball being Prime Minister. And he wears white shirts. Now he’s declared war on crony capitalism.
He wants to introduce greater shareholder controls which will effectively put a stop to company executives sitting on each other’s boards and approving increases and bonuses which are outrageous in themselves, and are also unjustified. This kind of old boys club rubber-stamping is bringing economies to their knees.
I think it’s interesting that while the middle classes were still alive and thriving Prime Ministers and Presidents turned a blind eye to crony capitalism. Has David Cameron woken up to the fact that a wounded animal is a dangerous one, and the middle class, what’s left of it, is just that? Weak and gasping, in desperate straits, debilitated almost beyond endurance and pushed to the limit.
And no wonder. Look at these statistics from The Institute for Public Policy Research: in 2010-2011, 87 of the FTSE 100 companies, chief executives earned 200 times what the average worker did. The execs got an average of £5.1million – that’s in basic pay, share incentives, pension contributions, bonuses. And this after they had four pay increases between 1998 and 2010. But it gets worse. Their pay increased by 33%, even though the average increase in company value was only 24%.
And for the crowning glory of this, on average bank bosses got an astonishingly audacious increase of 81% even though on average, company value rose by 19%. Out of 18 industries, one – Computing and Technology – had CEO average pay rises that were lower (at 13%) than the average increase in company value, which was 55%. But with all the rest, those CEO’s are taking whatever they want.
And people point fingers at Middle East dictatorships? At the moment, UK shareholders are totally impotent, since they have an advisory capacity only. Cameron’s suggestion is that they get to vote on salary packages and payoffs, and there’s a chance of corporate negligence becoming a punishable offence. Send those bastards to jail. Seize their assets. Introduce the word accountability back into the English language.
The argument in favor of letting these greedy pigs who are hopeless at their jobs get away with fortunes they don’t deserve – and that are in any case taken from the coffers of shareholders – has been that if you try to curb them they’ll go elsewhere. It’s an old, tired, fatuous and empty argument. Let them go. They can destroy somebody else’s economy. Better still, put them on an island. They can eat each other alive.
Naturally company bosses are feeling a little squeamish. Their argument – against giving shareholders a vote – is that they might have agendas! They can say this with a straight face? Well, tit for tat, and it’s time the fat cats got a dose of their own medicine. Don’t any of these guys read history? It’s humanly impossible to abuse masses of people without them eventually saying Hey! Stop that!
They always go down with bad grace.
- BBC News – Cameron promises powers to limit executives’ pay (worldwright.wordpress.com)
- Cameron accused of ‘diverting attention’ by highlighting excessive executive pay (prweek.com)