Lex writes today about ‘Executive compensation’. But ‘Executive compensation’ is to income, what Harry Potter is to literature.
Traditionally and in most people’s minds, income is earned from employment to fund current consumption, though some may be deferred (savings).
Anyone fortunate enough to have experienced a steady ascent from average income to say, ten times average income, will have discovered that income has limitations. Each increase results in a diminishing pool of useful spending options. But the main limitation of income is that you have to keep clocking in to get it.
The acquisition of and ownership of capital opens up many more possibilities. Capital is necessary to live comfortably and be free of work. Capital buys status. Capital buys power and influence. Capital buys security.
The open goalpost financial culture has led to a new shadow industry. This industry’s objective is the application of entrepreneurship by employees to find increasingly inventive ways to extract capital from it for their personal use.
Lex suggests that shareholders can vote for change. Lex : ‘it is helpful to establish principles on which shareholders can act, especially on dubious practices like golden parachutes, tax gross-ups, and personal perks’
But shareholders, in the real world Lex, are effectively disenfranchised (see my thoughts on this at https://fabooks.wordpress.com/2009/09/01/the-disenfranchisement-of-capital-%e2%80%93-how-the-city-stole-your-vote/
We really need you to sharpen up – we private shareholders, who own most of quoted UK PLC – need a champion, not a lackey.
Bun rating, 95% dough, meat extracted 5%