Wednesday, 28 September 2011

Heffer's law: executive pay

Perhaps the clearest sign yet that shareholder oversight alone is not enough to rein in executive pay - Simon Heffer thinks it is:
And it is hard to disagree with him about the inflated salaries paid to senior executives and city financiers that are in some cases no way proportionate to the risks they take or the money they earn for their companies.

Yet would this problem be solved by putting a worker on the remuneration committee of every company? Of course not.

The people who would be most useful in keeping pay down, and who have both a legal and a moral right already to do so, are that company’s shareholders. It is the value they hold in the company that is destroyed if executives are overpaid, and it is in their interests to see that it doesn’t happen.

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