Monday, 14 September 2009

Directors pay and Social Advantage

 

    The Guardian has published an interesting survey of FTSE 100 Directors pay.

It’s interesting firstly because of the ongoing debate about executive reward at the moment.

But what I wanted to focus on here, particularly given my recent post on Whole Foods, is the differential in pay between CEOs and average employees.

In general, the differential is quite a bit less that that described by John Mackey in his presentation on Conscious Capitalism – I presume because we’re looking at the UK rather than the US where the differential is presumably higher?  It’s still a lot higher than Mackey’s recommendation of 19x though.

And the highest differential – for Bart Becht, CEO at Reckitt Benckiser - is 1374! (ie Becht gets paid 1374 times the amount (£37m) paid to Reckitt Beckiser’s average employee - £27k).

This clearly isn’t a great basis for effective up and down collaboration.

 

Mind you, Cisco CEO, John Chambers’, recent $2m under-performance bonus doesn’t seem to be affecting the way it’s becoming more collaborative.

I guess this is only one part of the equation…

 

 

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