FTSE 100 CEO pay rose by 32%
Discussion
Anyone seen their FTSE tracker increase by 32%?
"In 2010, median average earnings -- the midpoint of pay for Footsie CEOs -- rose to £3.5 million, up 32%, according to a report from pay consultancy MM&K and Manifest, the corporate-governance agency.
Among the top 25 firms, CEOs saw their pay almost double, rising 86%. In contrast, the FTSE 100 index rose nearly 9% last year, on the back of a 22% rebound in 2009.
Last year, average earnings rose by less than 2%, but the Consumer Prices Index measure of inflation climbed by 3.7%. Thus, most workers received a real (after-inflation) pay cut in 2010. This was the biggest squeeze on real wages since 1921.
What's more, the average total pay for FTSE 100 CEOs is now 120 times the pay of a typical employee, versus a multiple of 45 times in 1998."
http://www.fool.co.uk/news/investing/2011/05/31/pa...
Not sure I'm seeing any connection between results and reward.
"In 2010, median average earnings -- the midpoint of pay for Footsie CEOs -- rose to £3.5 million, up 32%, according to a report from pay consultancy MM&K and Manifest, the corporate-governance agency.
Among the top 25 firms, CEOs saw their pay almost double, rising 86%. In contrast, the FTSE 100 index rose nearly 9% last year, on the back of a 22% rebound in 2009.
Last year, average earnings rose by less than 2%, but the Consumer Prices Index measure of inflation climbed by 3.7%. Thus, most workers received a real (after-inflation) pay cut in 2010. This was the biggest squeeze on real wages since 1921.
What's more, the average total pay for FTSE 100 CEOs is now 120 times the pay of a typical employee, versus a multiple of 45 times in 1998."
http://www.fool.co.uk/news/investing/2011/05/31/pa...
Not sure I'm seeing any connection between results and reward.
although I am generally pretty libertarian in all senses of the word, I think the massive disparity in the rates of salary growth between the poorest the richest is actually quite worrying. It doesn't just affect poor people, it's starting to affect people who ten or twenty years would have been considered reasonably well off members of the middle classes. I'm not really sure what society/government ought to do about the issue, but if it's not with quick then I think as a society we do face a bleak future. (I keep thinking of the french revolution).
Are they private companies?
Are they making a profit?
What is your issue? Just cause public sector is a black hole of wasting money you dont think that people who are making money for their companies shouldnt be paid more?
What has the mentality of they are not in this with us got to do with them getting more money? The government gets more tax off them and yes you do actually get more money, or would you rather they just signed their payrise over to the NHS directly?
So a director of a small company that is making good on the last year should now by your ideal not be allowed to do so?
Please do explain... Im very interested to hear this one.
Are they making a profit?
What is your issue? Just cause public sector is a black hole of wasting money you dont think that people who are making money for their companies shouldnt be paid more?
What has the mentality of they are not in this with us got to do with them getting more money? The government gets more tax off them and yes you do actually get more money, or would you rather they just signed their payrise over to the NHS directly?
So a director of a small company that is making good on the last year should now by your ideal not be allowed to do so?
Please do explain... Im very interested to hear this one.
Jackleman said:
Does it not also matter when these salary increases were agreed?
Around July last year the FTSE was around 4800 and now around 5800 and it has been at 6100 in recent months. That is quite lot of growth in a volatile market!
the issue with this... did the pay rises of the employees mirror those of the executives? Of course, both kinds of people are neccessary in a company.Around July last year the FTSE was around 4800 and now around 5800 and it has been at 6100 in recent months. That is quite lot of growth in a volatile market!
Du1point8 said:
Are they private companies?
Are they making a profit?
What is your issue? Just cause public sector is a black hole of wasting money you dont think that people who are making money for their companies shouldnt be paid more?
What has the mentality of they are not in this with us got to do with them getting more money? The government gets more tax off them and yes you do actually get more money, or would you rather they just signed their payrise over to the NHS directly?
So a director of a small company that is making good on the last year should now by your ideal not be allowed to do so?
Please do explain... Im very interested to hear this one.
Ditto.Are they making a profit?
What is your issue? Just cause public sector is a black hole of wasting money you dont think that people who are making money for their companies shouldnt be paid more?
What has the mentality of they are not in this with us got to do with them getting more money? The government gets more tax off them and yes you do actually get more money, or would you rather they just signed their payrise over to the NHS directly?
So a director of a small company that is making good on the last year should now by your ideal not be allowed to do so?
Please do explain... Im very interested to hear this one.
Du1point8 said:
So a director of a small company that is making good on the last year should now by your ideal not be allowed to do so?
The difference is that the director of a small company probably owns it.CEOs of FTSE 100 companies are just doing a job, but their rewards now border on almost unimaginable amounts of money, and they still get highly rewarded when they mess up.
Use Psychology said:
Jackleman said:
Does it not also matter when these salary increases were agreed?
Around July last year the FTSE was around 4800 and now around 5800 and it has been at 6100 in recent months. That is quite lot of growth in a volatile market!
the issue with this... did the pay rises of the employees mirror those of the executives? Of course, both kinds of people are neccessary in a company.Around July last year the FTSE was around 4800 and now around 5800 and it has been at 6100 in recent months. That is quite lot of growth in a volatile market!
Deva Link said:
Du1point8 said:
So a director of a small company that is making good on the last year should now by your ideal not be allowed to do so?
The difference is that the director of a small company probably owns it.CEOs of FTSE 100 companies are just doing a job, but their rewards now border on almost unimaginable amounts of money, and they still get highly rewarded when they mess up.
When they mess up they get what they agreed to in a contract if they did.
You do realise its a committee of the board that decides the pay rises dont you?
They dont just pluck the figure out of their own ass and give it to themselves?
The committee must think they are doing something right and earning their reward rather than getting it for the time served at the post.
The point is that people’s perceptions do matter. At a time when so many people are feeling the pinch, CEOs getting awarded astronomical pay rises is a smack in the mouth to many ‘ordinary working people’.
If a CEOs gets a 10% pay rise - or huge bonus - and all the other staff get the same percentage (or at least similar) then I think most people don't have a problem. When these huge salary increases happen in companies where other people are getting small rises, or none at all, or being laid off, then it's the kind of thing that pisses people off.
If a CEOs gets a 10% pay rise - or huge bonus - and all the other staff get the same percentage (or at least similar) then I think most people don't have a problem. When these huge salary increases happen in companies where other people are getting small rises, or none at all, or being laid off, then it's the kind of thing that pisses people off.
Marf said:
Why is that an issue? Private companies can pay whatever the f-ck they like.
yes, they can and i fully support that, as I said in my first post.the question is, should they?
historically, pay disparity has increased massively since the 50s/60s. is this the correct direction for us to be taking as a society? why is it happening? Does it reflect the truth of the relative amounts of 'value added' by the respective employees? Should it? etc.
I said right at the start that instinctively I am libertarian but I think this issue is only going to grow and cause harm to our society. I wondered if anyone had any thoughts on this issue...
rover 623gsi said:
The point is that people’s perceptions do matter. At a time when so many people are feeling the pinch, CEOs getting awarded astronomical pay rises is a smack in the mouth to many ‘ordinary working people’.
If a CEOs gets a 10% pay rise - or huge bonus - and all the other staff get the same percentage (or at least similar) then I think most people don't have a problem. When these huge salary increases happen in companies where other people are getting small rises, or none at all, or being laid off, then it's the kind of thing that pisses people off.
Why do perceptions matter to a profitable private company? All they care about is their bottom line, and rightly so....If a CEOs gets a 10% pay rise - or huge bonus - and all the other staff get the same percentage (or at least similar) then I think most people don't have a problem. When these huge salary increases happen in companies where other people are getting small rises, or none at all, or being laid off, then it's the kind of thing that pisses people off.
"After all, through our pension pots and other investments, we own a large slice of the stock market, including these FTSE 100 firms. Thus, when directors seek to enrich themselves at the expense of their shareholders, we mere mortals all lose out in the long run.
What we need is a shareholder revolution to put these tycoons back where they belong -- as our servants, rather than our masters. It's high time that companies returned to being run for the benefit of their owners, rather than their managers."
What we need is a shareholder revolution to put these tycoons back where they belong -- as our servants, rather than our masters. It's high time that companies returned to being run for the benefit of their owners, rather than their managers."
Use Psychology said:
Marf said:
Why is that an issue? Private companies can pay whatever the f-ck they like.
yes, they can and i fully support that, as I said in my first post.the question is, should they?
historically, pay disparity has increased massively since the 50s/60s. is this the correct direction for us to be taking as a society? why is it happening? Does it reflect the truth of the relative amounts of 'value added' by the respective employees? Should it? etc.
I said right at the start that instinctively I am libertarian but I think this issue is only going to grow and cause harm to our society. I wondered if anyone had any thoughts on this issue...
Personally, I don't care. It just strikes me that in recent years hard work and success are not lauded but lambasted, generally by the feckless.
Du1point8 said:
When they mess up they get what they agreed to in a contract if they did.
You do realise its a committee of the board that decides the pay rises dont you?
They dont just pluck the figure out of their own ass and give it to themselves?
The committee must think they are doing something right and earning their reward rather than getting it for the time served at the post.
this is the heart of the matter and the fact is the committees are poor at deciding on sensible rewards. When you compare the rate of growth of the FTSE 100 to the rate of growth of the renumeration packages to executives in these companies, you would have to come to this conclusion.You do realise its a committee of the board that decides the pay rises dont you?
They dont just pluck the figure out of their own ass and give it to themselves?
The committee must think they are doing something right and earning their reward rather than getting it for the time served at the post.
the committees are not particularly accountable to shareholders and this is, in my opinion, what perhaps needs to change first.
as a shareholder you'd be pissed if the CEO's salary was growing faster than the companies worth/profitability/size of dividend/whatever ... right?
rover 623gsi said:
The point is that people’s perceptions do matter. At a time when so many people are feeling the pinch, CEOs getting awarded astronomical pay rises is a smack in the mouth to many ‘ordinary working people’.
If a CEOs gets a 10% pay rise - or huge bonus - and all the other staff get the same percentage (or at least similar) then I think most people don't have a problem. When these huge salary increases happen in companies where other people are getting small rises, or none at all, or being laid off, then it's the kind of thing that pisses people off.
This all comes down to that, most of the FTSE companies actually started sorting themselves out over 3 years ago and hit profit again last year... If a CEOs gets a 10% pay rise - or huge bonus - and all the other staff get the same percentage (or at least similar) then I think most people don't have a problem. When these huge salary increases happen in companies where other people are getting small rises, or none at all, or being laid off, then it's the kind of thing that pisses people off.
Just cause the CEO of that company can react to the maket quicker than a snail that is public sector and realign the companies profit margins back into profit even before proper cuts have taken place elsewhere means that people that are now catching up to where they were 3 years ago and complain that its so unfair etc.
Its not, they are just adapting quicker than anyone else as they need to make a profit, places like the public sector dont and so take ages to do anything.
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