All reward, no responsibility

Written By: - Date published: 7:18 am, November 5th, 2012 - 37 comments
Categories: capitalism, class war - Tags:

The bosses justify their huge pay packets by saying they’re the elite, the wealth creators. They get the money because their genius makes sure things work. But, when it all goes to hell it’s the minions who get blamed. While the CEO gets a $100K bonus when she quits after 11 months! Nice work if you can get it, which is why the bosses congratulated themselves with a 10% pay rise this year.

37 comments on “All reward, no responsibility”

  1. Tracey 1

    So much for people accepting responsibility, as these folks frequently demand of beneficiaries to justify drug testing them, withdrawing funding and so on…

    Let’s not forget Mr Collins who was at the wheel when Brierly’s dropped to .28c. He got $4m to leave!!!!

    • Policy Parrot 1.1

      Not to mention the fact that he was off contract, so the board had no reason to pay him anything at all.

  2. Policy Parrot 2

    CE) and executive compensation has little to with company performance, rational explanation, and common decency.
    Bonuses have become simply a way to pay people more, rather than based on any performance criteria.
    Now, while I think is particularly abhorrent, there is little that people can do about it in the private sector, other than move their business away. But in the public sector there is something that can be done, and that is total compensation cap. And this will present an easy and popular solution to problems from Kaipara to Christchurch. Legislate for a total compensation cap, making the deputy PM’s salary the standard for which public sector chiefs can receive.

    The public sector is also about good service values and a commitment to value for money. This should be reflected, and since it hasn’t been arguably since the rise of NPM, it should be legislated for. Surely, if Maryatt and co are worth their actual beans, then they will have no problem getting that kind of money in the private sector, and our state sector will be free of those rapacious extrinsicly motivated muppets.

    EDIT: In light of the international transfer price debacle, where multinationals move their money around to avoid tax, perhaps there should be a law stating a multinational’s tax bill in any particular jursidiction should at least be equal to the money value of the CEOs total compensation for that year.

    • LynW 2.1

      +100 PP and all credit to Ian Taylor for speaking out.

    • OneTrack 2.2

      Full agreement on the total compensation cap. As you say, if they think they can do better, they can always move to the private sector. I suspect most (all) will stay exactly where they are (Marryat).

      • Colonial Viper 2.2.1

        89% income tax on incomes over 10x the average wage (= $490,000 pa) would provide an effective salary cap in NZ.

        • Policy Parrot 2.2.1.1

          CV – while I agree with the sentiment – it is just too easy to get around.

          * It is possible to avoid salary caps by payment in kind. That’s how some NRL clubs were getting around it for players, where do you think they got their advice?
          * I guess the other solution could be to mandate that any extra compensation be limited to no more than 10% of the headline salary. Again, though, it only takes a wink and nod to defer certain spending but not report it.
          * The reason why it should apply to the state sector is that government organisations are held to a higher standard, and there are political opportunities presented by government organisations attempting to defeat the spirit of any salary cap. Also, many public service chiefs have to have their compensation publically reported on, and their compensation set by the Remuneration Authority.

          • Colonial Viper 2.2.1.1.1

            Well yes, there is always going to be squirming aroiund the edges, but tools like fringe benefit tax can be modified to prevent many issues related to ‘getting around’.

            And there are plenty of rules already in place to prevent individuals and organisations from deferring income in order to get a lower tax rate.

            Of course, how those rules are applied and enforced will need examination.

            The reason why it should apply to the state sector is that government organisations are held to a higher standard, and there are political opportunities presented by government organisations attempting to defeat the spirit of any salary cap.

            These are all valid reasons for why these limits should be applied to the state sector. They don’t appear to present any problem for applying similar limits to the private sector too.

  3. Tracey 3

    Except the Dep PM’s salary is in addition to other expenses paid for which makes the “true” salary far higher than on paper.

    In my expeirence it can be much harder to be CE of a small/medium company than a large company because you have less quality people to delegate to…so it’s not necessarily about ability and outcome.

    Plenty on NZers apply for CE positions and who given the opportunity will do a fine job, we keep assuming those from other countries will be better… I don’t know why given the shit some of those nations are in.

    • Draco T Bastard 3.1

      +1

      Cap the salaries and the people will either stay or go. If they go we have more than enough skilled people to take over. These CEOs really aren’t as unique as they like to think.

      • Rogue Trooper 3.1.1

        While i think to ask, how has it come about that people like you (in particular) and the many other informed people who comment here know so much, about such a wide range of topics individually?
        (interested curiosity has been my motivation over the years, ironically, not so much “the meaning of life”)
        I wonder what Henri the existentialist cat would have to say about Guy Fawkes celebration.

        And why aren’t some of you people running for parliament? ( I wouldn’t get past the “normalcy” requirements, or maybe I would; I hear that that David Garrett chappie is into the Truth now)
        🙂

    • tc 3.2

      They’re given to people who will do as told and not rock the boat whilst being handsomely rewarded.

      Giving it to a local is risky as they normally aren’t part of the boyzngirlz club and probably know too much do will be effective and show up the club members.

  4. Colonial Viper 4

    Top exec and businessman speaks out against outrageous executive pay

    http://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=10845155

    Mr Taylor said a CEO’s remuneration “should be measured by how well he or she protects jobs and should bear a direct relationship to how well the employees … are paid”.

    In a letter to the Herald, he referred to a comment last week by former Nuplex chairman Fred Holland, who, when referring to a 26 per cent rise for non-executive directors, said: “You won’t get anything but monkeys if you pay peanuts.”

    Mr Taylor said: “If that means I have joined our fellow primates in his eyes then I know who I would rather spend my time with: Them and the countless other CEOs and management of small New Zealand companies who still live in the real world.”

    Mr Taylor’s business, established in 1990, is considered to be one of the top computer animation companies in the country.

    (Sorry for the cut and paste from Open Mic)

    • Tracey 4.1

      +++!

      And we’ve just seen what happens when a company is left to its own conscience with respect to its workers… the mine explodes and kills some. No LIbertarianz commenting int he media on this one…. of ocurse they would suggest that because there are regulations inn the play it’s not a true reflection of how an unregulated company would operate… I’m guessing

  5. burt 5

    Zetetic

    The MP’s need to start by cleaning up their own back yards first. Between 1999 & 2008 the Cabinet Ministers got circa 9% pay rises every year … So these other “greedy CEO’s” that have the ability to do something about all this need to set an example – that is … an example other than flipping the bird to workers by hiding behind the “we didn’t ask for it” BS.

    We didn’t see Clark complaining that her salary pretty much doubled between 1999 & 2008 did we !

    • Colonial Viper 5.1

      The MP’s need to start by cleaning up their own back yards first.

      How many MP’s make a million dollars plus a year mate?

      Just one I reckon: John Key.

      • burt 5.1.1

        Yes… CV I know you live in a deluded state where all this shit just started happening since we elected a National govt to clean up the recession created by your beloved red team… But did you miss the bit above about Clark doubling her pay and not complaining… Nothing to do with Key ….

        Grow up and face the reality – they are all as bad as each other and partisans like you defending your team isn’t helping !

        • Colonial Viper 5.1.1.1

          John Key is the only million dollar earner in Parliament. Do you deny it?

          Of course, the PM’s Parliamentary salary is about 93% less than pay for the NZ CEO of Westpac.

          Therefore the problem is in the private sector.

        • Policy Parrot 5.1.1.2

          “partisans like you defending your team isn’t helping !”

          “Et tu, pot?”

        • tc 5.1.1.3

          Jeez burt ‘clean up a recession caused by the red team ‘ not even shonkey and his mates in the MSM go with that porky. You need to get out from under your bridge more often.

        • Draco T Bastard 5.1.1.4

          National govt to clean up the recession created by your beloved red team

          The recession was caused by the policies that are being followed by this NACT government, namely, giving lots of wealth to the few and pushing wages down.

          • JonL 5.1.1.4.1

            “The recession was caused by the policies that are being followed by this NACT government, namely, giving lots of wealth to the few and pushing wages down”

            True in the main, but don’t forget the right wing “Labour” govs around the world who are also in the thrall of the neo liberal agenda – not quite to the same degree, perhaps (except the UK’s “new Labour” who are more like………old plutocrats), but still not doing anywhere near enough to mitigate those appalling attacks being made on populations around the world – I’d include Helen & Co. in this.

            • Colonial Viper 5.1.1.4.1.1

              The neoliberals wanted to be in power all the time, and what better way than to co-opt all sides of the political spectrum. The clearest example being the US Demoblicans. yes there are mild policy differences between the two, but overall the government policy of both major parties sit very well with the neolibs.

      • mike e 5.1.2

        Acshually key lost money in the last financial year due to his salary bonus shares paid out from Merrill lynch, which due to more corruption at Merrill lynch(now BofA Merrill Lynch ) his shares have declined dramatically my heart bleeds for him!

        • mike e 5.1.2.1

          Especially as these shares that Key owned would be worth nothing if not for rescuing via a massive US$ 45 billion Bailout by the federal govt making Shonkey New Zealands biggest beneficiary bludger!
          All be it courtesy of the US taxpayer!

  6. Bruce 6

    There was an interesting NYTimes article this topic recently titled
    “C.E.O.’s and the Pay-’Em-or-Lose-’Em Myth” based on a recent study

    http://www.nytimes.com/2012/09/23/business/ceos-and-the-pay-em-or-lose-em-myth-fair-game.html?pagewanted=all&_moc.semityn.www&_r=0

    *******
    The New York Times cites a new study by Charles M. Elson, director of the John L. Weinberg Center for Corporate Governance at the University of Delaware, and Craig K. Ferrere, one of its Edgar S. Woolard fellows, in addressing the “pay-’em-or-lose-’em” myth associated with CEO compensation. Their research concluded that, contrary to the conventional wisdom, chief executives cannot readily transfer their skills from one company to another. “In other words,” the Times states, “the argument that CEOs will leave if they aren’t compensated well, perhaps even lavishly, is bogus. Using the peer-group benchmark only pushes pay up and up.” Elson went on to call the trend a “false paradox.” He concluded, “We found that CEO skills are very firm-specific. CEOs don’t move very often, but when they do, they’re flops.”

  7. Michael 7

    Why not 100% tax on all incomes above a certain threshold? I like the idea of a multiple of the average wage and I think Aristotle would approve too (see: the Nichomachean Ethics, Book 5). Next, get rid of the Higher Salaries Commission (and the NACT party hacks who feed from that trough) and index government paypackets to welfare benefits instead (I don’t propose paying the PM a sickness benefit, merely linking his annual pay rise to the percentage increase of sickness benefits).

    • Colonial Viper 7.1

      Well I wouldn’t want to go over the historical US top income tax rate of 91%.

      The other point is that we need to take some tax burden off income tax and levy it back on to land, wealth and corporate profits.

  8. Fortran 8

    Surely, it is up to the Owners of a Company as to how much they pay their staff.

    Isn’t it ?

    • Policy Parrot 8.1

      You’d think so, Fortran, but it seems increasingly that institutional investors, managed funds, and cornerstone shareholders (frequently all limited liability companies in their own right) who often control more than half of the voting shares don’t give a flying fuck about how much any particularly staff member is paid. It seems that the executives (ie senior management but still employees, and not owners – in that they are legally allowed to influence decisions – any shareholding by executives through incentive scheme are supposed to be at arms length) are really in charge nowadays.

    • Colonial Viper 8.2

      Nope. Countries are wage setters, not wage takers. If you don’t want to do business in the country, fuck off and make room for someone else.

    • Draco T Bastard 8.3

      Been tried, not working out to well.

    • Tracey 8.4

      Depends on the type of society you want to be part of. Yes, companies are part of society, shocking I know.

  9. Michael 9

    Surely, it is up to the People of a Country as to how much they tax their citizens and corporations?

  10. feijoa 10

    yeah I get pretty annoyed when I hear people say how much risk these guys (mostly guys) take. Well I reckon the people out there who really take the most risks are the people working in forestry, fishing, farming, construction etc They risk DYING when they go to work

    • Colonial Viper 10.1

      Whereas the million dollar salary CEOs risk getting their golden parachute clause activated if they get the boot.

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