C.E.O.'s Salaries
Discussion
crankedup5 said:
ettore said:
blueg33 said:
Nope. It was mainly due to extensive and well secured strategic land and some high risk sites that were effectively bought very cheaply before his tenure.
Don’t challenge the ignorance with facts!!!Pretty much every volume developer needs to turn its land into an active site as soon as possible. But if you have a consent for 500 units you can’t build them all in a day, a month or a year. If you build to sales rates at the end of year one your land bank is 450 units because you can only sell 50 a year.
If your region builds 500 per annum, you have 10 active sites but your land bsnk now looks like 4500. If your group has 10 regions that’s 45000 units, if the eco has 10 housebuilders it’s 450,000 units.
That’s not developers sitting on land, it’s basic development economics. You don’t build faster than you can sell or your are f
ked. This is why all the landbank frothing from those with zero clue is wrong.
blueg33 said:
crankedup5 said:
ettore said:
blueg33 said:
Nope. It was mainly due to extensive and well secured strategic land and some high risk sites that were effectively bought very cheaply before his tenure.
Don’t challenge the ignorance with facts!!!Pretty much every volume developer needs to turn its land into an active site as soon as possible. But if you have a consent for 500 units you can’t build them all in a day, a month or a year. If you build to sales rates at the end of year one your land bank is 450 units because you can only sell 50 a year.
If your region builds 500 per annum, you have 10 active sites but your land bsnk now looks like 4500. If your group has 10 regions that’s 45000 units, if the eco has 10 housebuilders it’s 450,000 units.
That’s not developers sitting on land, it’s basic development economics. You don’t build faster than you can sell or your are f
ked. This is why all the landbank frothing from those with zero clue is wrong.
Edited by ZedLeg on Saturday 28th May 08:43
ZedLeg said:
Love to see someone explain why developers sitting on land because it’s not profitable to build is a good thing, meanwhile there’s an ongoing shortage of affordable/social housing.
Edited by ZedLeg on Saturday 28th May 08:43
You totally misunderstand. It’s all about WIP. No business makes things at a rate higher than it can sell. The land is profitable, but if you think it can all be built and sold instantly you haven’t given it a single thought. You have just joined the moronic bandwagon?
You probably don’t know that my current business builds
only social houses. The shortage of social housing is only loosely connected to the activities of the boiling developers. It’s more about procurement, funding, subsidy etc. There is enough underused state owned land to fully fix the social housing crisis.
blueg33 said:
You totally misunderstand. It’s all about WIP. No business makes things at a rate higher than it can sell. The land is profitable, but if you think it can all be built and sold instantly you haven’t given it a single thought. You have just joined the moronic bandwagon?
You probably don’t know that my current business builds
only social houses. The shortage of social housing is only loosely connected to the activities of the boiling developers. It’s more about procurement, funding, subsidy etc. There is enough underused state owned land to fully fix the social housing crisis.
Muzzer79 said:
A500leroy said:
Yes genuine question. With me being at the bottom of the ladder, just wondered how much harder the ceo is grafting to be worth the massive salary as i have no idea what he does!
It's not about 'graft' How hard you work is a common misconception.
A CEO works as hard as a nurse, as a plumber, as a road sweeper, as you.
The difference in remuneration comes from responsibility level, skill and vision.
As admirable and worthwhile job as it is, relatively speaking, lots of people could train to be a nurse in a relatively short time.
Being a good CEO is not a job that lots of people can do and it takes a long time to build up the experience to do it. Being as the talent pool is smaller, the pay is higher.
These are the kind of critical decisions that if wrong can sink a company and everyone goes home for the last time. That is a lot of responsibility and it doesn't stop when you leave the building in the evening, I have no objection to paying these people the big bucks but object when they cock it up and everyone else takes the pain.
Lastly why don't you ask your big boss why he gets paid the big bucks, worse-case he sacks you for being impertinent but you might just learn something, no risk no gain.
gottans said:
As a theoretical situation, you run a company developing your first product and one of your managers comes to you and explains the external designers used have cocked it up and sorting it out will cost you 300k and delay the project by 3 months. Considering you have limited funds in the bank that is better used elsewhere in the business, you aren't selling much so little money coming in and employee salaries are due. What decision would you make?
These are the kind of critical decisions that if wrong can sink a company and everyone goes home for the last time. That is a lot of responsibility and it doesn't stop when you leave the building in the evening, I have no objection to paying these people the big bucks but object when they cock it up and everyone else takes the pain.
Lastly why don't you ask your big boss why he gets paid the big bucks, worse-case he sacks you for being impertinent but you might just learn something, no risk no gain.
You think that’s high risk? That’s the kind of choice most people paid enough to be a higher rate tax payer makes all the time, especially in startups. Basic time/quality/cost choices and project risk management.These are the kind of critical decisions that if wrong can sink a company and everyone goes home for the last time. That is a lot of responsibility and it doesn't stop when you leave the building in the evening, I have no objection to paying these people the big bucks but object when they cock it up and everyone else takes the pain.
Lastly why don't you ask your big boss why he gets paid the big bucks, worse-case he sacks you for being impertinent but you might just learn something, no risk no gain.
It’s because what they have to do is something very few people can actually do well. For me the distinguishing feature of top CEOs I have worked with is their ability to convince other (intelligent and well-informed) individuals to follow them.
I’ve watched master CEOs:
- Convince multiple senior individuals, each with plenty of employment options, to join a failing company on a sub-par salary on the promise that together they “will turn it around”
- Get a board to sign off £100s of millions of investment in an acquisition which on paper looks unbelievably expensive, and simultaneously convince the founders of the company being acquired to sell for less than what someone else was offering them
- Cull 20% of a company’s staff (hundreds), and simultaneously convince the other 80% that the future is bright (so please don’t jump ship)
These are the actions which, if got right or wrong, create or destroy £100s of M (or even £bns) of value. It’s not so much the decision itself (though that is no joke), it’s about being able to pull it off at the same time as doing everything else.
The reality is if you are an investor with £1bn invested in a company, you are going to be bloody selective about who stewards that company, and demand things of them that only a few people can do. And if that person makes you another £1bn, you’ll be ok giving them a few £m too.
By the same token, if you are one of the few individuals who can do these things, you likely have a few offers on the table and are smart enough to demand handsome reward for your services.
I’ve watched master CEOs:
- Convince multiple senior individuals, each with plenty of employment options, to join a failing company on a sub-par salary on the promise that together they “will turn it around”
- Get a board to sign off £100s of millions of investment in an acquisition which on paper looks unbelievably expensive, and simultaneously convince the founders of the company being acquired to sell for less than what someone else was offering them
- Cull 20% of a company’s staff (hundreds), and simultaneously convince the other 80% that the future is bright (so please don’t jump ship)
These are the actions which, if got right or wrong, create or destroy £100s of M (or even £bns) of value. It’s not so much the decision itself (though that is no joke), it’s about being able to pull it off at the same time as doing everything else.
The reality is if you are an investor with £1bn invested in a company, you are going to be bloody selective about who stewards that company, and demand things of them that only a few people can do. And if that person makes you another £1bn, you’ll be ok giving them a few £m too.
By the same token, if you are one of the few individuals who can do these things, you likely have a few offers on the table and are smart enough to demand handsome reward for your services.
Electro1980 said:
gottans said:
As a theoretical situation, you run a company developing your first product and one of your managers comes to you and explains the external designers used have cocked it up and sorting it out will cost you 300k and delay the project by 3 months. Considering you have limited funds in the bank that is better used elsewhere in the business, you aren't selling much so little money coming in and employee salaries are due. What decision would you make?
These are the kind of critical decisions that if wrong can sink a company and everyone goes home for the last time. That is a lot of responsibility and it doesn't stop when you leave the building in the evening, I have no objection to paying these people the big bucks but object when they cock it up and everyone else takes the pain.
Lastly why don't you ask your big boss why he gets paid the big bucks, worse-case he sacks you for being impertinent but you might just learn something, no risk no gain.
You think that’s high risk? That’s the kind of choice most people paid enough to be a higher rate tax payer makes all the time, especially in startups. Basic time/quality/cost choices and project risk management.These are the kind of critical decisions that if wrong can sink a company and everyone goes home for the last time. That is a lot of responsibility and it doesn't stop when you leave the building in the evening, I have no objection to paying these people the big bucks but object when they cock it up and everyone else takes the pain.
Lastly why don't you ask your big boss why he gets paid the big bucks, worse-case he sacks you for being impertinent but you might just learn something, no risk no gain.
blueg33 said:
crankedup5 said:
ettore said:
blueg33 said:
Nope. It was mainly due to extensive and well secured strategic land and some high risk sites that were effectively bought very cheaply before his tenure.
Don’t challenge the ignorance with facts!!!Pretty much every volume developer needs to turn its land into an active site as soon as possible. But if you have a consent for 500 units you can’t build them all in a day, a month or a year. If you build to sales rates at the end of year one your land bank is 450 units because you can only sell 50 a year.
If your region builds 500 per annum, you have 10 active sites but your land bsnk now looks like 4500. If your group has 10 regions that’s 45000 units, if the eco has 10 housebuilders it’s 450,000 units.
That’s not developers sitting on land, it’s basic development economics. You don’t build faster than you can sell or your are f
ked. This is why all the landbank frothing from those with zero clue is wrong.
I recall television reports of land banking which had nothing built on the land for years, that’s greedy developers buying land on the prospect of land values rising years into the future isn’t it?
I do appreciate you don’t build faster than you can sell, that brings in massive arguments about VFM.
Why did the former CEO of persimmon homes receive such a massive bonus of £99million a couple of years back.? Just curious.
smifffymoto said:
Unfortunately shareholders of FTSE companies are usually insurance companies and pension funds whose decision makers are cut from the same cloth as the listed company.
There is only ever a backlash when they think their own shareholders won’t approve so the bullst continues.
Yup, that’s exactly the situation which brought about the ‘shareholders spring’ several years ago. The big boy shareholders usually form the review Boards as well.There is only ever a backlash when they think their own shareholders won’t approve so the bulls
t continues.gottans said:
Muzzer79 said:
A500leroy said:
Yes genuine question. With me being at the bottom of the ladder, just wondered how much harder the ceo is grafting to be worth the massive salary as i have no idea what he does!
It's not about 'graft' How hard you work is a common misconception.
A CEO works as hard as a nurse, as a plumber, as a road sweeper, as you.
The difference in remuneration comes from responsibility level, skill and vision.
As admirable and worthwhile job as it is, relatively speaking, lots of people could train to be a nurse in a relatively short time.
Being a good CEO is not a job that lots of people can do and it takes a long time to build up the experience to do it. Being as the talent pool is smaller, the pay is higher.
These are the kind of critical decisions that if wrong can sink a company and everyone goes home for the last time. That is a lot of responsibility and it doesn't stop when you leave the building in the evening, I have no objection to paying these people the big bucks but object when they cock it up and everyone else takes the pain.
Lastly why don't you ask your big boss why he gets paid the big bucks, worse-case he sacks you for being impertinent but you might just learn something, no risk no gain.
crankedup5 said:
blueg33 said:
crankedup5 said:
ettore said:
blueg33 said:
Nope. It was mainly due to extensive and well secured strategic land and some high risk sites that were effectively bought very cheaply before his tenure.
Don’t challenge the ignorance with facts!!!Pretty much every volume developer needs to turn its land into an active site as soon as possible. But if you have a consent for 500 units you can’t build them all in a day, a month or a year. If you build to sales rates at the end of year one your land bank is 450 units because you can only sell 50 a year.
If your region builds 500 per annum, you have 10 active sites but your land bsnk now looks like 4500. If your group has 10 regions that’s 45000 units, if the eco has 10 housebuilders it’s 450,000 units.
That’s not developers sitting on land, it’s basic development economics. You don’t build faster than you can sell or your are f
ked. This is why all the landbank frothing from those with zero clue is wrong.
I recall television reports of land banking which had nothing built on the land for years, that’s greedy developers buying land on the prospect of land values rising years into the future isn’t it?
I do appreciate you don’t build faster than you can sell, that brings in massive arguments about VFM.
Why did the former CEO of persimmon homes receive such a massive bonus of £99million a couple of years back.? Just curious.
blueg33 said:
crankedup5 said:
blueg33 said:
crankedup5 said:
ettore said:
blueg33 said:
Nope. It was mainly due to extensive and well secured strategic land and some high risk sites that were effectively bought very cheaply before his tenure.
Don’t challenge the ignorance with facts!!!Pretty much every volume developer needs to turn its land into an active site as soon as possible. But if you have a consent for 500 units you can’t build them all in a day, a month or a year. If you build to sales rates at the end of year one your land bank is 450 units because you can only sell 50 a year.
If your region builds 500 per annum, you have 10 active sites but your land bsnk now looks like 4500. If your group has 10 regions that’s 45000 units, if the eco has 10 housebuilders it’s 450,000 units.
That’s not developers sitting on land, it’s basic development economics. You don’t build faster than you can sell or your are f
ked. This is why all the landbank frothing from those with zero clue is wrong.
I recall television reports of land banking which had nothing built on the land for years, that’s greedy developers buying land on the prospect of land values rising years into the future isn’t it?
I do appreciate you don’t build faster than you can sell, that brings in massive arguments about VFM.
Why did the former CEO of persimmon homes receive such a massive bonus of £99million a couple of years back.? Just curious.
crankedup5 said:
Persimmon land banked and built hell for leather on that land in order to take advantage of the Governments housing policy of affordable homes buying? The fact that the advisors to the Persimmon shareholders agreed to a bonus contract to sell X numbers of those homes for the CEO, leaving it uncapped (a major error leading the Chairman to resign) cost the shareholders £99million. This example is why I have little faith in the ‘expertise’ of decision makers.
What do you think land banking is?As another developer here. Land banking as reported by the press basically does not exist. Blue has mentioned most of the reasons.
It's also further complicated by actionable consents and all the other crap you have to get agreed before starting. I had a site , with planning etc which sat for 2 years nearly before we could start because of a highways holdup(the council where crap and almost corrupt in cahoots with a "partner")
That would be reported as land banking, it wasn't and it was also costing me nearly £1000 a week in interest so the last thing I wanted to do was sit there!
Likewise you get planning for a big 500 unit site, you will build out at a market absorption rate(sales rate) which at the moment is full speed ahead. However you still can't build 500 houses in a year, most sites you can't get much quicker than 50-70pa. Are we land banking... NO.
It's also further complicated by actionable consents and all the other crap you have to get agreed before starting. I had a site , with planning etc which sat for 2 years nearly before we could start because of a highways holdup(the council where crap and almost corrupt in cahoots with a "partner")
That would be reported as land banking, it wasn't and it was also costing me nearly £1000 a week in interest so the last thing I wanted to do was sit there!
Likewise you get planning for a big 500 unit site, you will build out at a market absorption rate(sales rate) which at the moment is full speed ahead. However you still can't build 500 houses in a year, most sites you can't get much quicker than 50-70pa. Are we land banking... NO.
Exec remuneration is broken in the UK, and in many other places for that matter.
Based on quaint myths around shareholders keeping PLC Boards "on their toes" etc etc. I've worked at the centre of a number of large PLCs over the past 25 (sadly never been a CEO
).
But Boris sure isn't the man to rock that boat.
Generally CEOs are indeed paid too much, but perhaps more striking is the clustering and benchmarking, that bears very little relation to results (which are often only really measurable over the medium to longer term).
Based on quaint myths around shareholders keeping PLC Boards "on their toes" etc etc. I've worked at the centre of a number of large PLCs over the past 25 (sadly never been a CEO
). But Boris sure isn't the man to rock that boat.
Generally CEOs are indeed paid too much, but perhaps more striking is the clustering and benchmarking, that bears very little relation to results (which are often only really measurable over the medium to longer term).
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