It’s a recurrent BBC meme – “executives” are getting paid far too much and something must be done about it. (Cue Red Flag playing gently in background, comrades) True to form is this report which leads BBC news today…
David Cameron has promised shareholders a binding vote on executive pay, in an effort to deal with excessive salaries. The prime minister told the BBC there had been a “market failure”, with some bosses getting huge rises despite firms not improving their performances. He also pledged to tackle large payouts for executives dismissed because of poor performance.
The BBC then goes on to use the IPPR and the High Pay Commission as authoritative sources for demanding that “something” be done. Both these bodies are virulently left wing, as you can see here and here.
I’ll be on the BBC tomorrow (Nolan Show) to discuss this issue but my summary position is as follows;
1. I object to the State interfering in private business. It is none of the business of Government to instruct companies how much they should pay.
2. I also object to crony Capitalism, the enemy of the free market. But the sins of a few FTSE Top 100 financial companies are being manipulated by some to curtail private enterprise.
3. With State Sector workers earning more than those in the Private sector that funds them, I’m surprised the Prime Minister is not looking to curtail the excesses of that sector. For example, is a BBC presenter worth a salary package worth hundreds of time more than the man or woman who makes the tea in the BBC canteen?
4. Not all FTSE companies reward failure. Indeed if they did they would not remain top 100. I wanted to see large Banks that made poor decisions FAIL, but it was a left wing Labour Government which bailed them out. Now this is used as a form of moral blackmail over every other business in the UK and that too is wrong.
5. Is David Cameron going to pick up the bill for re-writing every employment contract in the UK so that severance terms are to his satisfaction?
Any other thoughts you want to share on this topic?