Welcome to Fat Cat Friday
Do you think at 2019 has hardly begun? We’ve already reached Fat Cat Friday. By January 4th top executives have already ‘earned’ as much as most of us will be paid by New Year’s Eve, Dec 31st 2019.
According to a survey Chief Executives of the Financial Times Stock Exchange top 100 companies trouser 133 times as much as the average worker. They are on over £1,000 per hour compared with £7.83 for the rest of us.
The survey was conducted by the High Pay Centre and the Chartered Institute of Personnel and Development, not the Bolshevik Party. Top people’s pay is spiralling out of control. In 1998 the difference with what the other staff gets was ‘only’ £45 to £1. How to explain the rise?
British capitalism has performed miserably over the past twenty years, with slow rates of growth interspersed with a catastrophic slump in 2008 and the years after. This is not performance related pay.
There are plenty of folk who would be prepared to volunteer for a job at £1,000 an hour. Unfortunately pay for the rest of us has either stagnated or fallen behind over the past decade. Top pay went up by 11% over the past year
How is fat cat pay established? Many top FTSE companies have remuneration committees to work out the rates. Have you ever heard of a shop steward on a remuneration committee? These people are a million miles removed from the rest of us. Their attitude is, “You scratch my back, I’ll scratch yours.”
When conglomerate Carillion was on the point of collapse, CEO Richard Howson watched it go down the toilet while the board stood idly by. The firm had racked up debts of about £1.5bn and had a reported pension deficit of £587m – but while the majority of its employees and sub-contractors were left high and dry by its collapse, the bosses continued to receive £4m in bonuses. The board then agreed to continue paying Howson a £660,000 salary and £28,000 in benefits until October 2018. This is a reward for failure.
Francis O’Grady, General Secretary of the TUC, accused the “greedy executives of taking more than they have earned. “ She is right. In a nutshell this shows what is wrong with British capitalism.