Thursday, 5 January 2012

The Liberal answer to mega pay

Clegg failed to impress this morning on the Today programme over controlling top pay.I regret that asking shareholders to be more active is simply not the answer. Shareholders want the maximum return on their investment. they are here today and gone tomorrow-and in the new electronic age sometimes they only stay a nano second.

If we are to control top pay then we have to revert to the Liberal Party policy of giving employees at least the same rights as share holders. Personally I'd prefer our template to be closer to the Mondragon model which so impressed Jo Grimond,. So lets start proposing that as a minimum employees should have a share in the ownership and profits of all enterprises above a certain limit and rights to be on the board determining strategy and pay.

If you look at the Employee Ownership sector of the economy -including financial Mutuals - they have  achieved a better control of executive pay as well as the other benefits of spreading asset ownership, better productivity, longterm decision making, happy workforces etc

2 comments:

  1. It might help also to be aware of the 'tournament effect' of pay systems where it isnt actually easy to do payment by results. The best intro is the chapter 'why your boss is overpaid' in Tim Harfords book 'The Logic of Life'.

    Oh and see the interview with Harford on Amazon about his latest book 'Adapt; why success always starts with failure' Is there something here for the Libdems to explore?

    The chapter in Adapt on employee-trusting companies like Timsons seems to map arguments onto part of the old Gimmond thesis...


    http://www.amazon.co.uk/Logic-Life-Undercover-Economist/dp/0349120412/ref=sr_1_1?s=books&ie=UTF8&qid=1325791563&sr=1-1

    ReplyDelete
  2. I agree Edis. The book by David Erdal http://www.amazon.co.uk/Beyond-Corporation-Humanity-David-Erdal/dp/1847921094/ref=sr_1_1?s=books&ie=UTF8&qid=1325792834&sr=1-1 also has some excellent up to date (2011) detail on the mega pay issue and the impact of employee ownership

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