World class rewards

Juan Kerr

Talk of the global market for talent seems here to be focused on those in banking; the fact they are paid so much more these days, a cause for celebration.

Or at the very least, we should recognise their rewards as being the inexorable rolling out of some iron law.

After all, without the steadfast work of people such as this, the world's money supply would be in chaos.

Mr Mhena

I like to see Polly T taken down a peg every bit as much as the next man, but I can't see that the Worstall piece detracts from her relevance here too much.

Besides which, the way he, as a professional writer, bludgeons words together in his attempt to convey meaning, is far from excellent.

If I hung a door in such a crude manner, I would be sent back to do it again for no charge.

But then that's it you see, there's talent and there's talent.

THX1138

Word Class Losses- No doubt this would include the same "talent" as the CEO's of the Investments Banks that have managed to lose a $1 Trillion Dollars in the sub prime crisis.

If you have time read When Genius Failed Roger Lowenstein's fantastic tale of the rise & fall of Long Term Capital Management. Riveting.

Matthew Blott

@ THX1138

I was about to make the same point but you've beaten me to it. I'm a supporter of globalisation and free markets but I think it's time to call the bluff on executive pay. Allowing shareholders to vote down excessive pay - which they can only do if they reject an annual report currently (something I wasn't aware of) - would be a start. I'm sure if one city banker left because he didn't like the conditions he could be easily replaced, it happens in most walks of life.

THX1138

Matthew - I agree & as an Investor I passionately believe in free markets but there is disconnect in the West between top exec pay & performance they don't suffer enough if the Co's do badly. I will give a couple of examples:

Take SP's beloved M&S, when trading conditions worsened earlier this year the board announced that rather than the directors taking a take a pay cut because targets weren't being met so lower bonuses, they would simply cut the targets to reflect "new market conditions" & hey presto 100% bonuses again all round. Where were the shareholders?

While Bear Sterns burned to the ground CEO James Cayne carried on playing his bridge tournament & refused to come back to NY but still walked away with over $30 million dollars while shareholders & staff lost everything in the JP Morgan bail out/takeover.

I think this is a Western problem In Asia they have no such bad habits, yes pay talent whatever it demands if they make you money, but to walk away with millions for failure would be seen as absurd. Shareholder activism is also much more taken for granted (remember the Co managers are looking after your money) I invest in two hedge funds based in Asia & they insist on putting directors on the boards of Co's in which they take a big stake I promise you no one will lowering targets in these Co's so the Directors can still walk away with 100% bonuses.