Saturday, 29 March 2014

Letter to Guardian:Executive pay and Co-determination

So Vince Cable has warned Britain`s biggest companies that employees might be given a "say over executive pay and perks" if they dont stop ignoring the law intended to improve transparency and to "link pay to performance", whilst at the same time, taking into account the "pay and conditions of the average employee". (Cable warns 30 biggest firms over executive payouts,26/03/14) Well, it`s not before time, especially as bosses are now earning "133 times more than the pay of their workforce", and that figure presumably has not figured in the minimum wages, or less, earned by cleaners and such-like who have been outsourced. As co-determination has worked well in Germany since the early 1950s in limiting levels of inequality, union representatives on companies` boards are long overdue in this country.
      Following the launch of the Fair Tax Mark, an award for businesses paying the correct amount of tax, a similar one could be initiated by a government targetting inequality. Provided a company paid at least a living wage to its lowest earners, including those outsourced, and did not pay oscenely high amounts or bonuses to those at the top, it could qualify, and include it in its advertising and publicity. Shareholders will undoubtedly object, as they already have to Cable`s threats; Sarah Wilson of Manifest might well complain that such issues are "more appropriately looked at by government", but if everyone washes their hands of the affair and denies having any responsibility for the appalling inequality in our society, things can only get worse! How disingenuous of her to justify the current situation of excessive pay by saying any change will threaten pension funds; there is no empirical evidence to suggest that obscene pay leads to improved performance, and plenty to say it adds to a country`s inequality, whilst doing next to nothing to drive the economy forward.

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