The EU bankers bonus cap, the Swiss Referendum on executive pay and the colossal bonuses awarded to the senior staff of failing, taxpayer-backed banks have brought the issue of high pay back to public prominence.
The timing of the EU’s announcement of a cap on bankers’ bonuses could not have been better.
On a day that RBS confirmed £287 million worth of bonuses for its investment bankers, to sit alongside an annual loss of £5 billion, not even the most squawkingly Eurosceptic parts of the media had the chutzpah to break out their template diatribe.
The Pensions Invesment and Research Consultants (PIRC), an adviser to pension funds responsible for a combined £2 trillion worth of investment, have announced that they will be advising clients to vote ‘no’ to all new Long-Term Incentive Plans (LTIP’s) introduced for company executives (see the attached press release from PIRC).
The debate around high pay is characterised by emotional language. Terms like ‘fat cats’, ‘eye-watering bonuses’ and ‘politics of envy’ are abound. Sometimes that’s understandable.
Switzerland is frequently cited as the destination of choice for super-rich individuals fearful of possible checks on their wealth and power in the UK. But the Swiss public are just as angry about excessive pay and inequality as we are.
The concept of ‘pre-distribution’ has grown increasingly popular with Labour Party policymakers, as witnessed by Ed Miliband’s use of the term at a Policy Network conference in London last week.