Login | Register
SearchMy Stuff
My ProfileMy PreferencesMy Mates RSS Feed
2 3 ... 11 12
Reply to Topic
Author Discussion

Fittster

Original Poster:

16,117 posts

99 months

[news] 
Tuesday 12th June 2012 quote quote all
One in four chief executives at Britain’s biggest companies took home a 41pc rise in total pay, while ordinary workers saw just a 1pc salary increase.

http://www.telegraph.co.uk/finance/jobs/9325216/Pa...

Now before someone tries to justify the pay of these masters of the universe.

The link between pay and firm performance is asymmetric. In good times, bosses’ pay rises a lot, but in bad times, it doesn’t fall so far. In fact, the biggest influence on bosses’ pay is not so much company performance as simply the size of the firm.

2. Big bonuses and performance-related pay are not technically necessary to elicit performance. There’s plenty of evidence that bonuses are sometimes ineffective at improving effort, sometimes actually counter-productive, and sometimes inferior to fines .

3. The claim that bosses must be paid a lot because their pay is set in a global market is silly. CEOs are paid more in the US than UK, and yet few Brits have become CEOs of US firms; one of the very few exceptions was Martin Sullivan who was CEO of, ahem, AIG. Holding down UK bosses’ pay is unlikely to lead to a mass emigration.

4. It’s not even clear that the average boss has much effect upon corporate performance. Take three facts:

- We know from football that changing coaches has no effect upon team performance. If bosses of organizations as small as 11 men can’t turn around performance, what hope do they have for larger organizations? As Warren Buffett said, when a boss with a good reputation takes over a business with a bad one, it is the business that keeps its reputation.

- Jonathan Haskel and colleagues have found that 80-90% of total factor productivity growth (pdf) comes from plants exiting and entering the industry, rather than from internal productivity growth. This suggests that bosses do less than widely thought to improve organizations’ efficiency.

- The death rate of companies is not only high, but statistically distributed (pdf) in a similar way to that of the extinction of species. This suggests that bosses can no more foresee (pdf) or prevent the demise of their firms than species can foresee or prevent their own extinction. Which suggests that bosses know less than we suppose.

source

London424

5,512 posts

61 months

[news] 
Tuesday 12th June 2012 quote quote all
Fittster said:
One in four chief executives at Britain’s biggest companies took home a 41pc rise in total pay, while ordinary workers saw just a 1pc salary increase.

http://www.telegraph.co.uk/finance/jobs/9325216/Pa...

Now before someone tries to justify the pay of these masters of the universe.

The link between pay and firm performance is asymmetric. In good times, bosses’ pay rises a lot, but in bad times, it doesn’t fall so far. In fact, the biggest influence on bosses’ pay is not so much company performance as simply the size of the firm.

2. Big bonuses and performance-related pay are not technically necessary to elicit performance. There’s plenty of evidence that bonuses are sometimes ineffective at improving effort, sometimes actually counter-productive, and sometimes inferior to fines .

3. The claim that bosses must be paid a lot because their pay is set in a global market is silly. CEOs are paid more in the US than UK, and yet few Brits have become CEOs of US firms; one of the very few exceptions was Martin Sullivan who was CEO of, ahem, AIG. Holding down UK bosses’ pay is unlikely to lead to a mass emigration.

4. It’s not even clear that the average boss has much effect upon corporate performance. Take three facts:

- We know from football that changing coaches has no effect upon team performance. If bosses of organizations as small as 11 men can’t turn around performance, what hope do they have for larger organizations? As Warren Buffett said, when a boss with a good reputation takes over a business with a bad one, it is the business that keeps its reputation.

- Jonathan Haskel and colleagues have found that 80-90% of total factor productivity growth (pdf) comes from plants exiting and entering the industry, rather than from internal productivity growth. This suggests that bosses do less than widely thought to improve organizations’ efficiency.

- The death rate of companies is not only high, but statistically distributed (pdf) in a similar way to that of the extinction of species. This suggests that bosses can no more foresee (pdf) or prevent the demise of their firms than species can foresee or prevent their own extinction. Which suggests that bosses know less than we suppose.

source
Without going into and detail at all about Executive pay... I do have plenty of views on that subject. The mention of changing coaches has no effect on a club's performance is quite laughable.

You only have to look at Chelsea last season. Going no-where to winning the Champions League. Tottenham appointing Harry went from second bottom to consistent top 5 finisher.

There are many more examples so I wouldn't have used football as the best reference for this particular argument.

Pesty

30,674 posts

142 months

[news] 
Tuesday 12th June 2012 quote quote all
My P60 was 5k down on last years frown on top of that everything else has gone up frown

1% would be fking great.

tonker

47,106 posts

134 months

[news] 
Tuesday 12th June 2012 quote quote all
Clough - Derby and Forest (obviously not Spurs !)
Shankly - Liverpool
Ferguson - United
Wenger - Arsenal

Even Rioch and Allardyce at Bolton, etc. etc. etc.

they make decisions and they make massive differences.

I do agree that Executive comp is a rats' mess..... they all employ comedy consultants to tell them that they always deserve more and hit their metrics to get their bonuses.... but at the same time, an individual can make an enormous difference and his/her strategic decisions can sort or ruin a business - compare and contrast the clowns at GEC and say Tesco (though I loathe it) under Leahy.

Or taking a car company - look at JLR before and after Tata - just management change really
Or Carlos Ghosn
Or the Porsche board who said yes to the Boxster....
Or Lutz, or, or, or...

PugwasHDJ80

5,906 posts

107 months

[news] 
Tuesday 12th June 2012 quote quote all
Fittster said:
One in four chief executives at Britain’s biggest companies took home a 41pc rise in total pay, while ordinary workers saw just a 1pc salary increase.

http://www.telegraph.co.uk/finance/jobs/9325216/Pa...

Now before someone tries to justify the pay of these masters of the universe.

The link between pay and firm performance is asymmetric. In good times, bosses’ pay rises a lot, but in bad times, it doesn’t fall so far. In fact, the biggest influence on bosses’ pay is not so much company performance as simply the size of the firm.

2. Big bonuses and performance-related pay are not technically necessary to elicit performance. There’s plenty of evidence that bonuses are sometimes ineffective at improving effort, sometimes actually counter-productive, and sometimes inferior to fines .

3. The claim that bosses must be paid a lot because their pay is set in a global market is silly. CEOs are paid more in the US than UK, and yet few Brits have become CEOs of US firms; one of the very few exceptions was Martin Sullivan who was CEO of, ahem, AIG. Holding down UK bosses’ pay is unlikely to lead to a mass emigration.

4. It’s not even clear that the average boss has much effect upon corporate performance. Take three facts:

- We know from football that changing coaches has no effect upon team performance. If bosses of organizations as small as 11 men can’t turn around performance, what hope do they have for larger organizations? As Warren Buffett said, when a boss with a good reputation takes over a business with a bad one, it is the business that keeps its reputation.

- Jonathan Haskel and colleagues have found that 80-90% of total factor productivity growth (pdf) comes from plants exiting and entering the industry, rather than from internal productivity growth. This suggests that bosses do less than widely thought to improve organizations’ efficiency.

- The death rate of companies is not only high, but statistically distributed (pdf) in a similar way to that of the extinction of species. This suggests that bosses can no more foresee (pdf) or prevent the demise of their firms than species can foresee or prevent their own extinction. Which suggests that bosses know less than we suppose.

source
Don't disagree with your general outlook, but your "facts" are questionable.

1. A football team is nothing like a company. In fact there are very very few similarities. Oh and just one name- Alex Ferguson- are you saying Man U would have done just as well without him? They really wouldn't

2.Haskel and colleauges- so between 10-20% growth could be down to one man? the fact they can't accurately define this figure speaks volumes! A multi-regression analysis shouldn't be impossible in order to quantify this figure. Why didn't they do this?

3. What? death rate of companies is like species? the death rate of companies is highest in the very first 12m of creation. Are you saying species do the same thing?
Advertisement

Fittster

Original Poster:

16,117 posts

99 months

[news] 
Tuesday 12th June 2012 quote quote all
London424 said:
The mention of changing coaches has no effect on a club's performance is quite laughable.
On the football tangent:

http://www.feb.ugent.be/nl/Ondz/wp/Papers/wp_07_43...

Our first analysis suggests that the shock effect of a turnover has a positive impact on team performance. However, accepting the positive impact of dismissing a coach without controlling for regression to the mean might result in misleading interpretations of the data. We calculated the regression effect and compared these data with the original. The analysis reveals no evidence to attribute the performance recovery following a change of coach to his/her successor and rejects the hypothesis of the effectiveness of coach turnover. The data suggest no impact of coach turnover in the short term. The results give support to the concepts of the organizational learning theory. Supporting the assumption that teams need learning time to improve performance, we would expect that the turnover effect is negative or non-existent. A period of approximately one month might be too short for new coaches to reconstruct the team according to the way they want to play the game.

However if you have Steve Kean as your manager you are fked.

KaraK

11,642 posts

95 months

[news] 
Tuesday 12th June 2012 quote quote all
I think that many of us, were we in the position to legally increase our pay by 41pc either by proposing it ourselves and getting it passed or whether it was offered to us would take it. So in modern parlance - "don't hate the player hate the game"

Oh and as a footnote the studies providing that football "soundbite" seemed to be saying that it has no statistically significant impact in the short term (I believe one study said 4 matches) or other specific circumstances. For the article to use it as a unilateral "fact" was a bit naughty IMO.

PugwasHDJ80

5,906 posts

107 months

[news] 
Tuesday 12th June 2012 quote quote all
Fittster said:
On the football tangent:

http://www.feb.ugent.be/nl/Ondz/wp/Papers/wp_07_43...

Our first analysis suggests that the shock effect of a turnover has a positive impact on team performance. However, accepting the positive impact of dismissing a coach without controlling for regression to the mean might result in misleading interpretations of the data. We calculated the regression effect and compared these data with the original. The analysis reveals no evidence to attribute the performance recovery following a change of coach to his/her successor and rejects the hypothesis of the effectiveness of coach turnover. The data suggest no impact of coach turnover in the short term. The results give support to the concepts of the organizational learning theory. Supporting the assumption that teams need learning time to improve performance, we would expect that the turnover effect is negative or non-existent. A period of approximately one month might be too short for new coaches to reconstruct the team according to the way they want to play the game.

However if you have Steve Kean as your manager you are fked.
That whole papaer only covers teams who are turning over managers very quickly to get short term results.

Not really relevant to the meiudm or long term performance of footie team.

Fittster

Original Poster:

16,117 posts

99 months

[news] 
Tuesday 12th June 2012 quote quote all
PugwasHDJ80 said:
3. What? death rate of companies is like species? the death rate of companies is highest in the very first 12m of creation. Are you saying species do the same thing?
you need to click on the links in the source article.

Death Rates: http://www.investorschronicle.co.uk/2011/09/15/com...

Fittster

Original Poster:

16,117 posts

99 months

[news] 
Tuesday 12th June 2012 quote quote all
PugwasHDJ80 said:
That whole papaer only covers teams who are turning over managers very quickly to get short term results.

Not really relevant to the meiudm or long term performance of footie team.
In this paper sport data are used to study the effects of manager replacement on firm performance. Using match results of the major Italian soccer league (“Serie A”) we analyze the effects of coach (manager) changes in terms of team performance. From our preliminary estimates, including year and team fixed effects, it emerges that changing the coach produces a positive effect on a number of measures of team performance. However, this effect turns out to be statistically insignificant once we take into account the fact that the firing of a coach is not an exogenous event, but it is riggered by a “dip” in team performance. Using as an instrument for coach change the number of emaining matches in the season (which is a proxy for the residual length of the coach contract) Two-Stages Least Squares estimations do not show any significant effect of coach change on team performance.


http://mpra.ub.uni-muenchen.de/11030/


&

"This research examines the impact of manager turnover on firm performance using information from the Dutch soccer league in the period 1986-2004. The main advantage of using sports data is that both manager characteristics and decisions and firm outcomes are directly observable."

http://ideas.repec.org/p/cpb/discus/166.html



Don't think I'm going to get this back on topic.

voyds9

4,991 posts

169 months

[news] 
Tuesday 12th June 2012 quote quote all
Does it not just spur you on.

I want to be an executive rather than a worker. So I get extra qualifications, work harder make suggestions, generally get noticed.

Seems a far better idea than being at the bottom of the pile and bleating on how well everyone else is doing.

Caulkhead

4,938 posts

43 months

[news] 
Tuesday 12th June 2012 quote quote all
Bosses in FTSE100 companies represent what percentage of UK business?

I'd be more interested in bosses in the SME sector which makes up 85% of UK industry and who, in times like these often pay their staff before they pay themselves IMHO.

Deva Link

26,934 posts

131 months

[news] 
Tuesday 12th June 2012 quote quote all
I realise this is about private sector but, in my view, much more outrageous is senior public sector figures pay.

Our local authority CEO got a £17K payrise last year to a package worth £235K.

Contrast that with the authorities care workers having their weekend and night pay rates reduced to plain time, costing already low paid workers £3500/yr.

Even our local fire chief got a £10K pay rise. Fireman's pay has been frozen for 3 yrs.

So much for us all being in this together.

DJRC

22,178 posts

122 months

[news] 
Tuesday 12th June 2012 quote quote all
Fittster said:
PugwasHDJ80 said:
That whole papaer only covers teams who are turning over managers very quickly to get short term results.

Not really relevant to the meiudm or long term performance of footie team.
In this paper sport data are used to study the effects of manager replacement on firm performance. Using match results of the major Italian soccer league (“Serie A”) we analyze the effects of coach (manager) changes in terms of team performance. From our preliminary estimates, including year and team fixed effects, it emerges that changing the coach produces a positive effect on a number of measures of team performance. However, this effect turns out to be statistically insignificant once we take into account the fact that the firing of a coach is not an exogenous event, but it is riggered by a “dip” in team performance. Using as an instrument for coach change the number of emaining matches in the season (which is a proxy for the residual length of the coach contract) Two-Stages Least Squares estimations do not show any significant effect of coach change on team performance.


http://mpra.ub.uni-muenchen.de/11030/


&

"This research examines the impact of manager turnover on firm performance using information from the Dutch soccer league in the period 1986-2004. The main advantage of using sports data is that both manager characteristics and decisions and firm outcomes are directly observable."

http://ideas.repec.org/p/cpb/discus/166.html



Don't think I'm going to get this back on topic.
Well you arent and its your own fault, you introduced evidence that got shot down within the first 3 posts. What evidence you then produce or argue over that aspect will be irrelevent because there is such an instant and easy counter argument to you. Given that your evidence is also "foreign" and the counter-argument is British then the argument is immediately stacked against you anyway.



crankedup

10,714 posts

129 months

[news] 
Tuesday 12th June 2012 quote quote all
Don't worry to much this is old news and being investigated for a complete overhaul of executive pay, long overdue IMO. Go get em' Vince.

iphonedyou

4,056 posts

43 months

[news] 
Tuesday 12th June 2012 quote quote all
voyds9 said:
Does it not just spur you on.

I want to be an executive rather than a worker. So I get extra qualifications, work harder make suggestions, generally get noticed.

Seems a far better idea than being at the bottom of the pile and bleating on how well everyone else is doing.
You and your work ethic. Just who do you think you are!?

For what it's worth, I agree. My parents did the same. My kids will do so too.

Matt p

387 posts

94 months

[news] 
Tuesday 12th June 2012 quote quote all
Something to aspire too smile

Few more years on the tools then it will be time to start moving up.

Fittster

Original Poster:

16,117 posts

99 months

[news] 
Tuesday 12th June 2012 quote quote all
iphonedyou said:
voyds9 said:
Does it not just spur you on.

I want to be an executive rather than a worker. So I get extra qualifications, work harder make suggestions, generally get noticed.

Seems a far better idea than being at the bottom of the pile and bleating on how well everyone else is doing.
You and your work ethic. Just who do you think you are!?

For what it's worth, I agree. My parents did the same. My kids will do so too.
And you'll in all likelyhood fail. The UK has the some of the worst social mobility in the world. You'll finish just where you started.


London424

5,512 posts

61 months

[news] 
Tuesday 12th June 2012 quote quote all
Fittster said:
iphonedyou said:
voyds9 said:
Does it not just spur you on.

I want to be an executive rather than a worker. So I get extra qualifications, work harder make suggestions, generally get noticed.

Seems a far better idea than being at the bottom of the pile and bleating on how well everyone else is doing.
You and your work ethic. Just who do you think you are!?

For what it's worth, I agree. My parents did the same. My kids will do so too.
And you'll in all likelyhood fail. The UK has the some of the worst social mobility in the world. You'll finish just where you started.
Seriously?? You don't think that if you work hard, demonstrate your worth, are the best person to be promoted up the organisation that you will make it to Senior Management levels. I'm afraid that probably says more about you than anything else.

There are numerous examples of FTSE 100 companies where Senior Management are filled with people who have come through the rank and file.

Snowboy

8,027 posts

37 months

[news] 
Tuesday 12th June 2012 quote quote all
Fittster said:
The UK has the some of the worst social mobility in the world. You'll finish just where you started.
Oh no it doesn’t.

Well, it depends very much on what scale you look at actually.

You might not be able to go from the son of a miner to become landed gentry, but it’s relatively easy for the miners son to end up being a white collar bank manager.

It’s very possible for the son of factory worker to become a company director earning 80k+ per year.

The UKs social scale is very broad and in general people might not be able to move far along it – but you don’t need to move far to have huge change in lifestyle.
The opportunities for personal advancement and self progression are huge, and there are almost no barriers.
Education is free to A-level standard, and open to all at degree standard (even if it does mean a loan)


It might be hard to jump from working class to middle class to upper class.
But you can certainly go from £15k per annum working class to £50k+ per annum working class without needing to have a rags-to-riches film made about your amazing success.
That sort of thing happens every day.


2 3 ... 11 12
Reply to Topic