Successful entrepreneurs quietly forget that the state supports their business in a myriad of ways. The government ought to remind them with a policy that restrains bosses’ pay
The departure of Jeff Fairburn as chief executive of Persimmon, the housebuilder, is a bittersweet victory for common sense. Mr Fairburn was originally granted a ridiculous £100m bonus but, after a public backlash, agreed to reduce that sum by 25%. A disastrous interview in which it was clear that he could not – and would not – defend his £75m payout meant it was only a matter of time before he would go. Now he has been asked to do so. It is galling that he keeps his ludicrous pay packet. In an age of insecurity, when the top 1% appear to be racing away with the nation’s wealth, it feels morally offensive.
How much bosses ought to be paid compared with their employees is an important question which politicians will soon be forced to face. From 2020, Britain’s biggest companies will be legally required to publish the gap between the salary of their chief executive and what they pay their average UK worker. History does offer some guide. In a very different age, Plato thought that the earnings of the very wealthiest should be capped at five times those of the poorest. The Labour party last year promised maximum pay ratios of 20:1 in the public sector and in companies bidding for public contracts.
Source: theguardian – realestate
The Guardian view on executive pay: a policy of restraint is needed | Editorial