The High Pay Commission report

Erm, excuse me, what are they on about?

that pay must escalate in order
to attract the best talent from abroad
to UK companies, is a myth. Our own
evidence shows that global mobility is
limited, with only one successful FTSE
100 chief executive officer poached in
five years – and even this person was
poached by a British company.

Bit weird insisting on the word \”poached\” there isn\’t it? The influence of foreigners on CEOs of FTSE 100 companies would be measured by how many foreigners were so employed, not how many were poached.

I\’m not going to go through the whole list but Bob Diamond\’s an American, The Lloyd\’s head who is on stress leave is Spanish, Vodafone certainly was run by an Indian and that\’s just those I can recall before the second cup of coffee.

They\’re how to put this politely, rather picking their numbers, aren\’t they?

This report, the final report from the
High Pay Commission, makes 12
recommendations to address what we see
as a crisis at the top of British business.
We believe it is time to act to build
transparency, accountability and fairness
into remuneration for senior executives in
the UK.

That\’s also pretty stupid. The FTSE 100 is not UK business: UK business is not the FTSE 100. FTSE is, by and large, a group of global businesses that are listed in London, the international financial capital of the world. There are very few companies there which are exclusively or even majority UK operating businesses.

We also get the classic call for permanent State jobs for the current members of this private sector voluntary commission:

12 Establish a permanent body to
monitor high pay
Our investigations have found that
escalating high pay is having a negative
impact on company performance, the
wider economy and trust in business.
We have been shocked at the limited
information available to the public, the
consequent lack of informed public
debate and the deep sense of unfairness
that this lack of openness engenders. We
recommend that a permanent body be
established on a social partnership basis,
much like the Low Pay Commission by
government to:
••monitor pay trends at the top of the
income distribution
••police pay codes in UK companies
••ensure company legislation is
effective in ensuring transparency,
accountability and fairness in pay at
the top of British companies
••report annually to government and
the public on high pay.

Just couldn\’t do without that, could we?


The first
companies were licensed to trade by the
state and that inter-dependence and the
idea of ‘permission to trade’ underpinned
company activity until the late 1970s.15

Their reference is to the East India Company\’s charter. You know, a state granted monopoly is exactly the way in which limited liability companies operated up until the 1970s?

I could go on having fun with this but no need to, not with that lovely little search function built into .pdf files these days.

At no point at all do they mention \”globalisation\”. Which is really rather an important point.

Within country inequality has been rising everywhere. The economic rewards have everywhere been flowing to the top, the top 1%, the top 0.1% even for those countries where we have the information. This is a global phenomenon: and as such has, at least one would think so, a global cause.

As I\’ve been saying for years now, that global cause is globalisation itself.

Now I don\’t say that they\’ve got to agree with me that this is the cause: but I do say that they\’ve got to at least consider that it might be, even if to reject it. Gini indexes, the percentage of income going to the top 1%, 0.1%, top peoples\’ pay has been rising faster than median pay everywhere. This just isn\’t something specific to the UK as they seem to think. And yet their report blames everything on specific changes within the UK.

Me, I reject this report as pure bollocks. They\’ve not even considered the most obvious cause in rising in country inequality: globalisation. As such they\’ve simply fapped themselves into a frenzy over the old, stale, hobby horses and not bothered in the slightest to get to grips with a proper analysis of why it has been happening.

And if you don\’t bother to find out why something has been happening then you\’ve got no chance whatsoever of proposing the necessary changes to stop it happening.

This whole High Pay Commission report is crap folks, utter shite.


7 thoughts on “The High Pay Commission report”

  1. It wasn’t until at least the third time I’d heard them trotting out their platitudes on the BBC this morning that anyone mentioned that this was just another pressure group and not something, well, official.
    But then we wouldn’t expect the BBC to make that sort of thing clear, would we?

  2. Hmm by poached they mean the poaching of an extant FTSE CEO to a non UK Company. Nothing to do with the number of FTSE CEOs that are non UK citizens. This doesn’t mean that the report is bollocks of course, but does explain their apparent “error”

  3. ‘We have been shocked at the limited
    information available to the public’

    What nonsense, you can find a detailed breakdown of the base salary and other renumeration of, not just the CEO but, all directors in any publicly listed company quite easily. It’s all there set out for you in the companies annual reports and accounts which can usually be downloaded as a pdf for free online. All the information you could want is already available.

  4. Odd that the very principal-agent problem doesn’t get a mention. The problem is of course doubled for listed companies, as we investors in pension funds and unit trusts aren’t able to influence our fund managers, and then the fund managers aren’t able to influence the pay in the companies they own.

  5. The HPC has a self-fulfilling policy – by wanting to force companies to curb CEO income, yes, the FTSE100 WILL have lower CEO incomes…only not the same companies, who, I suspect, will de-camp to more rational and envy-free climes.

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