The FT has reported:
Bank chiefs' average pay in the US and Europe leapt 36 per cent last year to $9.7m, according to data compiled for the Financial Times, despite variable performance across the sector.
I think that's one of the most generous comments the FT must have ever made. A sector that survives only because of massive state subsidy that underwrites all its risk abuses that subsidy to give massively overpaid people an astronomical pay rise is a better interpretation.
There is an answer, of course. That is to remove all tax releif for payments of salaries that exceed 10 times median pay in the country in which they're settled. Of course, pay splitting would be illegal between companies and countries within a group, just to make sure this was effective.
This would not stop this absurd level of pay, but it would make it much more costly and set in stone the ratio of pay levels a government thought acceptable. That would happen to be about 20: 1 with minimum pay in the UK with the maximum tax allowable pay set at £240,000or thereabouts.
There's something else that could be done too: in the UK the government could just say no to the absurd payments made at Lloyds and RBS. It's no credit whatsoever to any of our politicians that this has not happened. Even corporate investors had more courage and voted against that pay.
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What about overpaid civil servants, like the head of Royal Mail who is paid over 700K? It isn’t just the private sector with their snouts in the trough, the upper levels of the public sector have exactly the same greed.
I suspect he’s really only there to destroy the Royal Mail so the posting industry can readily be be farmed out to private companies (read; Cameron’s wealthy chums). That’s what he’s actually being paid for in my view and as such it’s probably the going rate.
BB
Dear Justin, I’m sure Richard will entirely agree with you on this one, but such behaviour by ‘public servants’ is, if not the whole point, then certainly part of the malaise which began with the neo-liberal attack on the whole idea of “the common good” and on the “public service ethic”, both of which the neo-liberals attacked as being mere flim-flam and impossible of achievement. In their place they argued for unfettered market forces, the famous “invisible hand” that would do good (for all) by doing best for itself. Well, we’ve seen the results, haven’t we; “public servants”, like the head of Royal Mail, with their “snouts in the trough”, as you correctly observe, as they have aped the private sector (good?), presiding over a near fatally wounded public sector (bad?), in a society and economy where wealth has been shifted from those in need to those in want (where ‘want’ is defined as “Gimme loadsa dosh”). The posts on this blog about the sort of society we would like to see, and the appeals to Labour (or the Co-Op Party or the Green Party or anyone) to set about envisioning and building such a society, are an impassioned plea – a cry from the heart – for a truly ethical, but also effective and efficient economy and society, and the 20:1 ratio should, I agree, apply across society, including the public sector.