We are told that the multi-million pound payments to bosses are rewards for excellence. But read the rules for the bonuses set by the remuneration committees, and you will see that many are paid for performance that is no more than better than average for their peer group. If the Olympics were run this way, the medal podium would need twenty five separate platforms.
Reality: Forget "excellence", the Lloyds Banking Group and the RBS remuneration strategy pays bonuses for better than average.
Reported in the FT, 5th July 2011: Vikram Pandit's, CEO of Citigroup (US bank rescued by US taxpayers in 2009) pay deal:
ReplyDelete"Mr Pandit’s package awards him “incentive” pay of at least $6.65m if Citigroup’s pre-tax earnings for 2011 and 2012 hit $12bn – well below the $20bn the bank made in 2010 alone."
http://www.ft.com/cms/s/0/c6117b4c-a736-11e0-b6d4-00144feabdc0.html#ixzz1RIWbOpVv
Reported in the FT, 21st July 2011: Cable&Wireless' pay for performance:
ReplyDelete"Mr Pluthero and Jim Marsh, the former [C&W] chief executive who resigned at the third profit warning, were paid £10.2m and £9m, respectively, in cash under the now defunct long-term incentive plan, based on the former C&W group’s share price performance.
One of the company’s biggest institutional shareholders said: “The company has been a fiasco for a decade and needs an exorcist to rid it of its problems. So much has been paid out to executives and so little achieved.”"
http://www.ft.com/cms/s/0/39167356-b3b5-11e0-855b-00144feabdc0.html#ixzz1SoomwfFX
Reported in the BBC, 5th September 2011: "total pay packages for company executives in the wider FTSE 350 had gone up by 700% since 2002 - while the index [value of the companies] had risen by only 21%."
ReplyDeletehttp://www.bbc.co.uk/news/business-14781254