Latest Shouts

Yesterday Vince Cable gave a speech to his party’s conference and whilst he should have concentrated on what he is going to do about growth he did make some valid points.

He raised the point of remuneration of managers of business and how this has got out of control over the years.  I was speaking to some friends over the weekend about the very same subject.

Nobody objects to a business founder who took the initial risk in setting up a business taking a massive salary. However what has happened over the last 10-20 years is the appointed management of a company have started taking the big bucks for no risk.

Look at the case of Fred Goodwin (I object to calling him Sir!) and the remuneration he took whilst managing the Royal Bank of Scotland close to bankruptcy.

He took no risks in setting up the business and was rewarded for failure. What’s even more astonishing about Fred the Shred is he isn’t even a banker, he’s an accountant.

I have always been an ardent Capitalist but even I now believe the we need to control these excesses and prevent them happening in the future.

A model that is touted around is the one used by The John Lewis Partnership this is where the Chief Executives pay is based on the following rule - “The pay of the highest-paid partner will be no more than 75 times the average basic pay of non-management partners, calculated on an hourly basis.”

We need to consider how we approach this going forward and we do need to legislate to stop the abuses.