Say what you will about a global economic meltdown, at least losing money and the fear of failure make people more likely to face up to the facts
Say what you will about a global economic meltdown, at least losing money and the fear of failure make people more likely to face up to the facts
Or it should. Over the past few months, CEOs who are on the ball have made cuts, altered company strategy and come up with a plan to weather the storm. That’s all well and good, but the next step may be for business leaders to question how much they themselves are raking in.
Our research report, Directors’ Pay On AIM 2008, shows that a great many chief execs, financial directors and non-execs are not afflicted with false modesty when naming a price for their skills and talents. It seems that a market correction – a reality check – is needed to bring inflated wages and bonuses back to earth.
Generosity abounds on AIM. Eighty-six chief execs pocketed at least £500,000, up from 51 last year. Likewise, boards at 173 ventures were rewarded with over £1 million of cash – far in excess of the 120 last year and almost three times the 59 from 2006. You have to wonder what remuneration committees are thinking.
Because I’m worth it
The average CEO pay within a profitable entity is up eight per cent to £324,050. Fair enough, you might say. But the average pay at a loss-making company is up 30 per cent to £223,148. Such rewards for scant returns suggest greed has got the better of genuine commercial interest and, for a public entity, responsibility to shareholders. But, on reflection, perhaps this is what is meant when AIM is referred to as a ‘truly entrepreneurial market’.
Be that as it may, if you take pride in what you do and feel passionately about growing a great business, you’ll be looking twice at how you and the board are remunerated. Don’t be short-termist, avaricious. Ultimately, the more successful the business, the better your rewards will be when it’s time to exit.
And whatever you get then will be richly deserved.
