Con Dem heavyweight, self-styled "free radical" Vince Cable, Britain's Business Secretary, today unveiled his much touted crusade against crony capitalism and grasping executives. After a 4,000% (yes, four thousand per cent) real terms increase in the pay of the FTSE 100 executives over the last 30 years, quite a few of us have suggested for a while now this was more than past the time to take real action.
Let us briefly remind ourselves of how Vince's mate, Nick Clegg and his boss David Cameron trailed this latest Con Dem initiative.
Cameron talked of the executive pay merry-go-round of Directors sitting on each others remuneration committees and of "market failure" as top pay rocketed by 33% in one year, while corresponding company share values rose by only 24%, and ordinary staff pay by somewhere less than 4%. On 8 January, he promised real action - no gimmicks - in creating "responsible capitalism".
Clegg, meantime, promised to "get tough"on the abhorrent levels of executive pay back in early December. Like Cameron, he wanted shareholder power to be given legal status to ensure that company AGMs could vote down excessive pay awards (at the moment, such votes are not binding) and similarly he complained about the "I'll scratch your back if you scratch mine" arrangement of mutual participation on each others remuneration committees.
So, finally, today, Vince the Crusader unveiled his heavy hitting package of regulatory reform as he fearlessly TOOK ON the pirate captains of British industry:
ZAP!: shareholders will be allowed to have a binding vote on executive pay, if they ask...
POW! : shareholders may also be able to "demand more clarity"on executive pay deals...
KERCHANG!: Company boards are to be "more diverse" by ensuring that two people on each board should not have been board members before...
BLAM!: the views of ordinary staff should be "taken into account" if they ask for them to be..although Vince pointed out that this is already the completely ineffective and almost entirely disregarded law in large companies...
WHOOOOSH!....er...er...well, that's it really...
So much for the great assault on crony capitalism. The new shareholder right to have a binding vote is not unwelcome, but given the massive logistical difficulties of anyone wanting to communicate with and organise a majority vote among the shareholders of these huge companies, it is hardly likely to set the heather on fire. On the BBC tonight, Cable admitted that "no (executives) will be quaking in their shoes over this..." And earlier in his statement he had been at pains to stress the Government has no plans to "micromanage" company pay. Indeed, he was not even willing to give his opinion on the touted seven figure bonus due to be awarded to the head of the state-owned RBS bank. Apparently, any speculation was "above my pay grade."
It is hardly surprising. In spite of all the rhetoric of the last few weeks, it would have been far more of a shock if a government of committed neo-liberals and free marketeers had done anything at all to tackle the excesses of the moneyed class. It is striking that the sole piece of legislative action - the possibility of binding votes on pay - supports the owners of companies. The Government had made noises about supporting the High Pay Commission's call for a worker's representative to be put on each remuneration committee; but Cable turned this down on the pathetically laughable grounds that, as some companies have overseas employees, it would apparently be too difficult for them to participate in electing a representative. And as for Directors on each others remuneration committees, the shocking corruption condemned so fiercely by both Clegg and Cameron? Vince the Bold says it happens so rarely that "it isn't actually a problem..." So, no need to do...anything, after all.
And so, with both government parties sympathetic to cutting income tax for higher rate tax payers - the Lib Dems have opposed it mainly during the recession; many in their party, including Clegg ally David Laws still see cutting top rate tax as a longer term aim - the chances of any genuine redistribution of income or wealth are lower than zero under the current regime.
The upward climb of the rich goes on unabated. The ever-pompous Cable, meanwhile is revealed as the Don Quixote of delusional reform; except even his windmills are imaginary. If this is responsible capitalism, only the Invisible Hand can save us now.... Erm...
Let us briefly remind ourselves of how Vince's mate, Nick Clegg and his boss David Cameron trailed this latest Con Dem initiative.
Cameron talked of the executive pay merry-go-round of Directors sitting on each others remuneration committees and of "market failure" as top pay rocketed by 33% in one year, while corresponding company share values rose by only 24%, and ordinary staff pay by somewhere less than 4%. On 8 January, he promised real action - no gimmicks - in creating "responsible capitalism".
Clegg, meantime, promised to "get tough"on the abhorrent levels of executive pay back in early December. Like Cameron, he wanted shareholder power to be given legal status to ensure that company AGMs could vote down excessive pay awards (at the moment, such votes are not binding) and similarly he complained about the "I'll scratch your back if you scratch mine" arrangement of mutual participation on each others remuneration committees.
So, finally, today, Vince the Crusader unveiled his heavy hitting package of regulatory reform as he fearlessly TOOK ON the pirate captains of British industry:
ZAP!: shareholders will be allowed to have a binding vote on executive pay, if they ask...
POW! : shareholders may also be able to "demand more clarity"on executive pay deals...
KERCHANG!: Company boards are to be "more diverse" by ensuring that two people on each board should not have been board members before...
BLAM!: the views of ordinary staff should be "taken into account" if they ask for them to be..although Vince pointed out that this is already the completely ineffective and almost entirely disregarded law in large companies...
WHOOOOSH!....er...er...well, that's it really...
 |
| Cable's Crusade - the mask slips.... |
It is hardly surprising. In spite of all the rhetoric of the last few weeks, it would have been far more of a shock if a government of committed neo-liberals and free marketeers had done anything at all to tackle the excesses of the moneyed class. It is striking that the sole piece of legislative action - the possibility of binding votes on pay - supports the owners of companies. The Government had made noises about supporting the High Pay Commission's call for a worker's representative to be put on each remuneration committee; but Cable turned this down on the pathetically laughable grounds that, as some companies have overseas employees, it would apparently be too difficult for them to participate in electing a representative. And as for Directors on each others remuneration committees, the shocking corruption condemned so fiercely by both Clegg and Cameron? Vince the Bold says it happens so rarely that "it isn't actually a problem..." So, no need to do...anything, after all.
And so, with both government parties sympathetic to cutting income tax for higher rate tax payers - the Lib Dems have opposed it mainly during the recession; many in their party, including Clegg ally David Laws still see cutting top rate tax as a longer term aim - the chances of any genuine redistribution of income or wealth are lower than zero under the current regime.
The upward climb of the rich goes on unabated. The ever-pompous Cable, meanwhile is revealed as the Don Quixote of delusional reform; except even his windmills are imaginary. If this is responsible capitalism, only the Invisible Hand can save us now.... Erm...
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