Dimpost: Galtian overlord watch

Written By: - Date published: 9:33 am, September 1st, 2011 - 21 comments
Categories: business, capitalism - Tags:

Galtian overlord watch

Via Stuff:

Top chief executives are being paid up to 50 times as much as their average employees – and the gulf between boss and worker is widening.

The first annual survey by BusinessDay of pay rates at NZX-listed companies also found that the best-paid boss was receiving more than $4.7 million.

A workers’ representative has dubbed the widening pay gap the “moral question of our time”.

…..

is Paul Reynolds worth $4.7 million dollars a year? Here’s Telecom’s share price for the last few years, the black line indicating when Reynolds took office:

….

The CEO labour market is broken:

The [Stanford] study, which reviewed CEO pay and economic performance between 1991-2002, found that in small firms, highly paid CEOs generally are more skilled than their industry counterparts. The correlation is even stronger if the firm has a large shareholder or if the CEO has been paid largely in stocks and options. Conversely, pay is more likely to be negatively related to skill in larger firms. “In many large firms, the highest paid executives actually performed the worst,” said Daines.

This was especially the case when the business was bound by what Daines called “environmental constraints”: regulations, limits on capital spending, or a very competitive climate. “Some CEOs have a lot of options to consider while making investments and other strategic decisions. Others are more constrained,” Daines said. The lesson there? “When managers can do less to affect firm outcomes, there’s less reason to pay them high salaries,” said Daines.

21 comments on “Dimpost: Galtian overlord watch ”

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  1. aerobubble 1
    1 September 2011 at 9:51 am

    That akes far too much sense, shouldn’t you move to Australia?

  2. crashcart 2
    1 September 2011 at 11:02 am

    but but but free market meanas they get paid what they deserve and and and your just envious of what they earn and and if we don’t pay them that much we won’t get the best here.

    Hey look at that pretty thing over there while I go post some where else.

    • aerobubble 2.1
      1 September 2011 at 1:55 pm

      Assets sales will mean we won’t have to borrow money!

      This is a lie!

      We are heavily indebted as a country, most will not be able to afford
      to buy the shares on offer, and if they do will borrow money!

      But its worse, it does nothing to stop and reverse the erosion
      of credit in the NZ economy, rather Assets sales BUY TIME and
      expose us to more payments for borrowing.

      Assets sales will make us even more in debt! because we won’t
      have the income to pay down debt that National have run up
      and now claim is going to blow out in years to come.

      yeah, blow out it will if we sell the golden eggs and loose
      the fees from them!!!

  3. Bored 3
    1 September 2011 at 11:48 am

    And the string bean would have us believe he actually knows how to catch trout. I would wager that I am worth mega amounts more in that regard. And no, it wont be on TV because I am not sharing the spot or technique after today…no downloading my IP.

  4. queenstfarmer 4
    1 September 2011 at 11:57 am

    is Paul Reynolds worth $4.7 million dollars a year?

    No. Though Gattungs performance was even worse than Reynolds’, I think, in terms of long term damage to the business.

  5. tc 5
    1 September 2011 at 12:00 pm

    Reynolds delivered as instructed in a job most top telco execs would’ve run away from knowing Deane/Gattung drove the infratsructure into the turf…thus the whoppingly bloated package as they needed him, he didn’t need them. The grumpy scot’s a canny deal maker.

    Those instructions would be ‘do nothing….when the nats get back so do we as a monopoly provider’ Still took over 2 yrs after the 08 election to position themselves to be ready for UFB which shows the malaise it was in, and still is in some respects but $1Bill of taxpayer money helps fix that up…kaching!

    • KJT 5.1
      1 September 2011 at 2:15 pm

      I think the question is more what Dean/Gattung were worth.

      After running the infrastructure, customer numbers and service levels down they also managed to drop the share price.

      They should have had to pay to do the job.

      • tc 5.1.1
        2 September 2011 at 7:11 am

        And some of the crucial points reynolds used to negotiate his stellar deal…..that and they really couldn’t touch any existing telecom candidates who participated in the running down.

  6. Lanthanide 6
    1 September 2011 at 12:21 pm

    Interesting timing:

    Twenty-five of the 100 highest-paid US CEOs earned more last year than their companies paid in federal income tax, a Washington think tank has reported.
    …
    The study found the gap between CEO and worker pay widened last year to 325 times the average worker’s pay in 2010 from 263 times in 2009.

    http://www.stuff.co.nz/business/world/5547090/Some-US-CEOs-paid-more-than-firms-taxes

    • aerobubble 6.1
      1 September 2011 at 1:58 pm

      Hows that work? You make profits so get a bonus, but those profits aren’t
      paying taxes, so isn’t that just fraud? I mean if they paid the taxes, they
      would not get as much bonus and so have intentional avoid taxes. So
      much so that they make millions and pay peanuts in tax!

    • Irascible 6.2
      1 September 2011 at 2:45 pm

      Doesn’t take too much reasoning to understand why the USA is in the financial mess that it is now in. As this is but only part of the iceberg that is the tax cuts based me, me, me policies that the Republicans created and which are being followed by Key & co in NZ. Watch for similar figures emerging here.

    • joe90 6.3
      1 September 2011 at 5:39 pm

      “We have no evidence that C.E.O.’s are fashioning, with their executive leadership, more effective and efficient enterprises,” the study concluded. “On the other hand, ample evidence suggests that C.E.O.’s and their corporations are expending considerably more energy on avoiding taxes than perhaps ever before — at a time when the federal government desperately needs more revenue to maintain basic services for the American people.”

      http://www.nytimes.com/2011/08/31/business/where-pay-for-chief-executives-tops-the-company-tax-burden.html?hp

  7. RedLogix 7
    1 September 2011 at 7:18 pm

    This is of course nothing but legalised theft. Personally I’d be happy to see legislation capping executive renumeration to five times the median pay of their whole organisation… globally.

    But why do we have to legislate for basic decency? The fact is that far too many managers at all levels routinely fail to make the distinction between organisational power and personal power. That boundary gets blurred all the time; managers frequently get away with behaviour that if they tried it on in any other situation would get sorted in no time flat.

    The consequent fear, loathing and stress caused by sociopathic management culture is literally a killer. If the nation you lived in attempted to curtail your basic rights and freedoms in the same way that the company you work for does every minute of every day it would be rightly regarded as an intolerable tyranny.

    Yet in exchange for mere money we meekly accept base servitude in the iron grip of these greedy, amoral suits squeezing the life from us.

    • Colonial Viper 7.1
      2 September 2011 at 8:07 am

      There’s a problem where many of our best managers have left NZ has the type of management work here has decreased in quantity and career quality, and now we have young managers who often only have the worst role models to learn from in terms of management style and behaviour.

      I know of a workplace where half the top worker team is about to resign en masse because of issues with rude, in your face management.

      The fact is that far too many managers at all levels routinely fail to make the distinction between organisational power and personal power. That boundary gets blurred all the time; managers frequently get away with behaviour that if they tried it on in any other situation would get sorted in no time flat.

      Excellent.

      We demand representation, a voice and true influence everywhere else in our lives, why not the workplace. Democratic socialism FTW.

  8. Drakula 8
    1 September 2011 at 8:42 pm

    Isn’t it about time Telecom was nationalized?

    • mikesh 8.1
      1 September 2011 at 8:59 pm

      It might make sense to nationalize Chorus after the separation.

      • tc 8.1.1
        2 September 2011 at 7:16 am

        A different govt should do that as they’re effectively underwriting it and, let’s be serious, it’s no longer just about web surfing it’s vital 21st century infrastructure…..try living without it to pay bills. Similar to power, water it should be mandated as fairly available at a fair price……something telecom are simply not wired to ever ever do.

    • Colonial Viper 8.2
      1 September 2011 at 9:26 pm

      You start by having the Government compulsarily acquiring 2.5% of the company at a 10% discount to market.

    • MrSmith 8.3
      1 September 2011 at 10:03 pm

      Not by this lot Drakula, Telecom will be funding Nationals election advertising in return for the UFB contract. so you could argue it’s already nationalized, first telecom need to get it up and running then strip it bare then sell it back to the government. after pulling billions out of it meantime, who could blame them.
      They are a bloodsucking company that might appeal to your tastes! 

  9. Oligarkey 9
    2 September 2011 at 9:29 am

    I can’t help but think they could get a highly competent and experienced person for 10% of this guy’s pay. That level of income would indicate that there only a few people in the country capable of doing what he does, which is just not believable.

    I also think that it’s ridiculous that anyone should be consuming that amount of the world’s resources. The environment can’t afford it, and there are people in this country that can’t afford to eat a nutritionally adequate diet. It’s just obscene.

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