The FT is getting very excited about the fact that they say new disclosure regimes on CEO pay will not work. The substance of their claim is that if Goldman Sachs pays all its staff a great deal on average the massive salary paid to its CEO will represent a smaller ratio to average pay than will the ratio of John Lewis' boss to his or her average staff members' pay.
The word 'spurious' comes to mind when considering this objection.
And the answer is obvious: as I suggested recently, publish the pay of all staff in bands, showing the number of staff in each £10,000 band by gender and country. Then we would have the data to do any calculation we like.
The trouble is that the proposal made on CEO pay is a gesture. We don't want gestures. We want data. That's what accounts are meant to supply. Then we can make up our own minds. That's what accounts are also meant to enable.
So the question is do the FT understand the objectives of accounting, or are they being deliberately obtuse?
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What interests me here is the nature of the work the CEO over sees. The relatively sedate pace of retailing at John Lewis versus the high risk legal and morally foggy operating environment at Goldman Sachs are as different as chalk and cheese.
It is well known now that remuneration packages in the City are often what fuels rule breaking and risk taking – the sort that helped get us the 2008 crash and other instabilities.
Reading the morning papers for 1793, as one does, it was interesting to see the government publicly reporting as a matter of course, pensions and benefits granted. What a shame that our present systems of communication have deteriorated so much.
Delicious!
More. please.
“The substance of their claim is that if Goldman Sachs pays all its staff a great deal on average..”
Heard that joke about averages? – Bill Gates walks into a bar. Everyone’s now on average a millionaire.