James O'Brien is Leading Britain's Conversation.
5 August 2017, 21:05
Do not envy the top 1%, they are having a particularly hard time of it lately.
The pay packets of FTSE 100 chief executives fell by almost a fifth in the financial year to 2016.
They are tightening their Gucci belts and trying to get by on a remuneration of just £4.5m.
That is why what they get is called 'remuneration', by the way - it is a very long word to denote a very large sum...and that is why what you get is called 'pay', for the same reason.
Britain's average worker's salary is £28,000. It would take them 160 years to make what a top boss makes in one year.
The CEOs get paid that much because they sit on each other's remuneration committees and award people like themselves stupendous amounts so as to set a benchmark for their own pay when their remuneration committee sits.
It's a circle of executive back scratching - I'll set your pay and you can set mine.
Once the standard is set, they pretty much get to award themselves so much in bonuses and benefits that their performance in the job bears no relation to their income. They're safe no matter how cack-handed and inept they are at their job.
The worse that could happen is that they suffer a pay cut to £4.5m a year, or they get fired and given a cheque so big you could carpet a football field with it.
This remuneration inflation is infecting other organisations too.
An Oxford University bursar has slammed the ‘grossly excessive’ pay packet of his own vice-chancellor.
New College bursar David Palfreyman said it was hard to see a ‘value for money return’ for the escalating pay of Oxford’s leaders or any ‘improvement in governance’.
Oxford’s vice-chancellor Louise Richardson earns around £410,000 including pension.
Now we know why student fees are so huge. A large portion of university funding comes from them, which will rise to £9,250 a year next month.
If the people running universities were paid handsomely, as they used to be, and not stratospherically, as they are now, maybe students would not have to graduate with average debts of £50,000 hanging over their heads.
Supporters of university chancellors insist that they are modestly paid when compared with the UK’s top bankers.
But they’re not bankers...and they're not footballers or film stars either, for that matter.
Celebrities can get paid a lot because they make more money for their employers than they cost.
And bankers get paid the way they do because they deal in money for a living and there has to be some compensation for doing the world's most dull job.
The vice-chancellor of the University of Bolton, George Holmes, defended his £222,000 salary saying university bosses are not paid enough compared to those in other countries.
Not paid enough?
It's amazing what you get used to straight away - you get used to a massive TV pretty much the moment you replace your old tiny one, and you get used to the comfort of first class the moment you turn left on the plane and you get used to earning 10 times the average salary as soon as it goes into your bank account.
Because if you have wangled it, you must be worth it.
By the way - the Federation of Small Businesses has announced that the forthcoming rises to the National Living Wage may need to be delayed.
It's all to do with the sluggishness and uncertainty in the economy caused by you-know-what.
The wage is currently scheduled to rise to £8.75 an hour by 2020.
But it said the National Living Wage should rise from £7.50 an hour to no more than £7.85 next year.
A whole £2.45 extra per day for our lowest paid workers over 25 years old to lavish on themselves.
Workers younger than that are paid the National Minimum Wage, which is £3.50 an hour for an apprentice.
To bridge the wealth gap, all the low paid worker needs to do is to take the precaution of becoming one of those CEO’s.
But as they’ve just had a pay cut of 20%, down to only £4.5m a year, it hardly seems worth the effort.