I remember the discussions we used to have back then in my MSc class in Hull on Executive Pay which often led to disagreements. There was a course mate of mine who always argued for the wide disparity in pay of CEOs and other group of employees. On my own part, I was never moved with any argument he puts up. Never mind the title of this piece, I still do not.
It is disturbing however to see that years on after the University of Hull’s experience, CEOs still enjoy these fat pays. From all indication, executives will continue to rise at the detriment of employees who barely live on minimum wage. I was amused to hear Mike Ashley, the owner of Sports Direct, relinquished his desire to participate in a bonus share scheme for employees of the sports wares outfit. If Ashley’s participation had sailed through, it would have been a case of the “rich getting richer”.
The case of Sports Direct is not an isolated one, fat pay and other bonuses for executives are now a global phenomenon. It is also disturbing to note that when executives decide to vacate their positions, the payoff is usually outrageous and not minding that employees are struggling to pay their bills. In cases of liquidation, executives still leave with huge amount of money when ordinary employees are losing their mortgage.
Sometimes I ask myself the justification for all this jumbo pay and each time I am left bewildered with no answers. They are merely bunch of people who do not care a bit about their employees. I have heard a case of executives drawing up bogus exit package for themselves only for the Board to demand for a package that incorporates all employees. Yes, that level of self-centeredness! How can this ugly trend be tackled?
In countries where caps are placed on executive pay, compliance has not been effective. This is due to the absence of strong political will to ensure compliance. A better effective approach needs to be developed. Your suggestions are welcomed.
Bashir Baba can be engaged on Twitter @El_De_Bash