A certain City crowd would try to convince you that there is a serious problem with what this nation pays its chief executives.
Yes – far too little. How can we attract the very best talent from America and elsewhere if they are to live on such pittances as £5 million or £6 million a year? Don’t we realise the hit to the economy from our parsimonious?
The heart does bleed.
But let’s survey some recent evidence. The chaps who built Melrose into an industrial giant are going to share £180 million.
That’s on the back of £4.5 billion in shareholder value created, and half of it goes to the taxman. No one lost here. Be jealous, but don’t be mad.
Other CEOs, Tim Steiner at Ocado as we report today, also seem to do reasonably well, and in his case the value creation bit is a lot more, erm, open to interpretation.
He was part of the team that invited Ocado in fairness. It would not exist otherwise, whether it needs to exist is for shareholders to say.
Anyway, back to our bog-standard, regular, so-so CEOs.
Well M&S boss Stuart Machin took home £4.7 million this year, on the back of a decent turn around of the company. His co-chief Katie Bickerstaffe got less – just £4.4 million – call in the Low Pay Commission immediately and file suit about the gender pay gap.
Neither Machin nor Bickerstaffe invented M&S. It is just possible it would still exist, still have enjoyed an improvement in its performance, under someone other than these two. If they both stay for ten years, then assuming no pay rises, that’s nearly £50 million each. Ordinary CEO folk can muddle through on that.
Bluntly, there isn’t the slightest problem with our CEOs getting too little money, and you have to live in the mother of all bubbles to imagine otherwise.
My last point: If our CEOs really are underpaid, surely they’d be snapped up by those giant American businesses that pay so much more.
How many of them are? As near to none as makes no difference.
