I was reading today about how Yahoo ex-Chief Operations Officer Henrique de Castro got a $60 million payoff. Henrique was sacked after being with the company only 15 months. Nice work if you can get it.
On the local scene the University of Ulster has just appointed a new Vice Chancellor. Professor Paddy Nixon will get a £250,000 annual salary – £1000 more than the head of Queens, Professor Patrick Johnston. By comparison Birmingham University pay their vice-chancellor £400,000, Cambridge pay their chap £334,000. Universities have thousands of staff and turnovers in the tens of millions. So are these salaries fair? Do we need to pay this level to attract the highest quality of people? Or it is an obscenity when our local Universities are raising fees and cutting thousands of student places?
The ex CEO of Translink Ms Mason, got a £199,000 pay packet. More than Prime Minster David Cameron (at £142,000) and First Minister Peter Robinson (£114,000). The new chap David Strahan has to make do with only £156,000. Would someone have done the job for £90k?
The issue here is the growing income inequality in the UK. The UK now has more billionaires per head of population than any other country. There are 104 billionaires in the UK with a combined wealth of £301bn.
The richest 1% of the population take about 6% of total incomes earned in Denmark or the Netherlands, according to the World Top Incomes Database, less than half the 13% taken by the richest 1% in the UK.
Should a UK CEO really earn 800 times more than his average worker? Public companies are free to do what they like but this idea that the public sector need to match the rates of the private sector is a dangerous road to go down. A lot of evidence now shows that high CEO pay can actually damage companies.
This is a tricky issue. The new boss of the University of Ulster could be a complete wizard. He could attract millions of pounds of research funding. He could attract thousands of high fee paying overseas students that boost the economy of NI. Or he could muddle along and retire on a humongous pension – we just don’t know.
It seems to me a more sensible solution is to offer a performance related package. A low base salary then bonuses based on actual performance.