>> Incidentally why do these employees, need increases and bonuses of millions of pounds to motivate
>> them for another years work when the rest of the employees should accept sub inflation
>> pay rises and see their benefits such as pensions stripped away from them?
No, I’m not sure I am missing the point. Of course we, and businesses, need the right environment. But not enough people thought that Labour could provide it. Or that Jeremy could run the Labour Party.
High salaries are a matter for shareholders and the tax system in my opinion. They’re not about short term motivation, but usually linked to creating long term shareholder value. It’s disingenuous to suggest that the CEO has little to do with successful businesses performances; occasionally they’re lucky, but for everyone that is there are many hundreds that make a real difference. The CEO of Bet365 was paid a salary of £323m last year. Through payroll, so including employers NI HMRC got around £200m I reckon, out of a total cost to the business of £400m. A 50% tax take. That’s a lot, in the scheme of things and would take an awfully big increase on those earning >£85k to recover...
Now I think there’s a case to be made for taking the US approach to high salaries, which is to not make them deductible for corporation tax purposes. But that still hasn’t held back US salaries so I don’t know what the real answer is. Capping them to a multiple of the lowest earning would mean that theCEO of an SME would earn the same, if not more, than that of the CEO of Tesco - palpably a silly position. I do know that a bigger cake overall is better than a small cake, as long as it is shared. 50% of £400m makes a lot more difference that 60% of nothing. And I’m not sure who gets sub inflation pay rises at the moment - minimum and living wages are rising at a higher than inflation rate, so it’s not them. On the south coast there’s a shortage of skilled workers, so it’s not the next tier either in my experience. And so on. I accept it might be different elsewhere, though not at the bottom end of the income distribution scale.
On the pensions front, Labour under Gordon Brown started the attack on private/company pensions. Again, unintended or ill thought through consequences. When everyone was in the same pension scheme CEO to shop floor interests were, broadly, aligned. As soon as the lifetime allowance was introduced that alignment was broken. Now that’s not the only reason, of course. But it was a key trigger.
Last edited by: VxFan on Sat 21 Dec 19 at 21:20
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