Guess who gets a pay rise? Hint: it’s not a worker
The $33 million man – Business – Business – smh.com.au
If this isn’t a clear enough example of how we live in a class-divided society, I don’t know what is – actually there’s probably numerous more, but I digress. Allan Moss, CEO of the Macquarie Bank has gotten himself a $12 Million pay rise. 12 Million Dollars!
His current exorbitant salary of $33 Million is 747 times the average worker’s wage. Added to the abhorrent figure is the fact that most of it is paid in a ‘profit-sharing’ scheme. Yeah, we know it’s not shared evenly and he won’t be taxed on a heap of it due to being paid out in expenses and other underhanded accounting tactics.
The board has been bragging that they deserve it because of the boost in profit, which is up 60% this year on the back of the average family running into debt, loosing their homes etc. and yet this profit is far from shared amongst the 10,000 workers. The average worker won’t receive a massive pay rise out of this despite being the ones wasting around 38-hours a week earning their boss’s insane pay packet which is at something like $16,000 an hour.
Fucking ridiculous if we didn’t live in a system that is underpinned by this kind of exorbitance at one end and complete impoverishment at the other.
I guess there was a time when they kept the lid of this sort of opportunism, that day is long gone.
To become a CEO and do the job well you pretty much have to know an industry very well, have a good ability with business relationships, understand how organizations work, and be able to make some clever decisions. Most of them are very experienced and very smart and very steady personalities, and if you met them you would probably find them genial, considerate and friendly. Few are monsters, though some are.
To get that experience, they will have done an apprenticeship, and proved their value somewhere in a corporate system consistently over decades and delivered enough times in difficult situations that they stand out from the crowd. The corporate system that made them is quite obviously a system created for making money, both for shareholders and also for the elite who sit at the top of the food chain to entice the winners up to the fore. And this is kind of the crunch point for those who insist that they are worth the money.
The thing is there are plenty of industries and fields of human Endeavour where people like CEOs – as smart and as capable or brilliant or just plain effective – work they way up over time. Think of government, the military, charities, medicine, universities and many other fields.
In most of these fields however, the opportunity does not exist to tap into vast reservoirs of wealth to reward their achievements. In fact, success in these fields is measured by service or contribution to the field, not by how well a company has done, although elements of that can enter into it, the work of a national leader is one.
Although top people in businesses probably always have earned more than their counterparts in other sectors because more wealth was available for this, they did not always make such obscenely larger amounts of money. They were paid well, perhaps, but also rewarded by the satisfaction of doing their job well and increasing prosperity for society, at least in theory.
Enter the major shift in global perception of the past few decades that finance, global capitalism and wealth generating capacity was somehow a virtue in itself. At some point, the people who reached the top of the food chain in the corporate world began to realize that by virtue of being the champions of the system, the biggest winners in a system about winners, and financial winners in particular, they could reward themselves, and their ilk with ever sweeter and expanding pay packets. It made sense in that climate, and it could be accepted without shareholders getting mad at them – and keeping shareholders happy is their primary concern and bugbear.
Of course this is everything to do with capitalism as it has evolved, but in other ways, it is nothing to do with market forces or capitalism. It was quite simply an opportunity available to certain people who made their way to positions of power in the business sector, to define themselves as being worth more and more money in a climate where this was not questioned but assumed to be part of a new virtue in society. They could do it, and so they did. The people who decided they could, or made it possible were people like them, with similar backgrounds and understandings, who had a vested interest in making things better for other members of the same club.
At the end of the day there is no particular reason why people of their caliber in other, less lucrative fields could not have done the same job they did as well as they did it, it is simply a matter of which direction these men and women took at a certain point in their career. You could perhaps argue that certain people gravitate towards thing they do best, but knowing the hap hazard way that people make decisions early in their life, I think this is a weak argument or at best a partial truth.
So what we have ended up with, is a group of people who have found a honey pot they hold the key too and they decide the sweetness and depth of. It is a tempting pot too, because not all people who joined the upper echelons of corporate capitalism are satisfied with getting a windfall because they made a lot of money for the company.
Situations like Enron have shown how members of the corporate elite will cheat lie and steal to get their sugar fix. And Enron, I can assure you, from my many years of working in the corporate sector is not an aberration. There are plenty of people in people in big business who are ethical and conscientious, but it is a world that is driven by the ethos of doing whatever needs to be done to make money.
Hiring hitmen and militia, courting dictators, killing thousands through neglect and many other things are possibilities that can and have been made logical through the abstract pursuit of profit. People will sanction these things and run their corporations legitimately, at least as they see it, in the search for great shareholder return, imagine what they might do when they don’t have the scruples to even pretend to themselves they are decent corporate citizens.
It is these people, the ‘good’ and the ‘bad’ who increasingly are making the decisions that shape our world. Marxist or not, if you feel something needs to be done about them, then I am with you 100%, because I don’t trust the best of them to do what is right for humanity.
Thanks Kev for the in depth comment. I’m pretty chuffed that someone is interested in my site enough to do this.
Firstly, even though some CEOs may have ‘nice’ personalities, this isn’t the thing that drives their actions. It’s their position in society, at the top of Australian capitalism that drives them to make more money for those at the top at the expense of the rest at the bottom.
Those that make it up from the bottom are few and far between. It seems the media latches onto these rare stories to make us seem that we can move up to CEO in society if we work hard enough. In fact, this is not the case. We can’t all be CEOs because no work would get done
Most CEOs land in the position they’re in because they were born into wealthy families that paid for business college and got them a job up the top from the get-go. There are exceptions, but the majority of time, they were born into that position in society.
With the psyche stuff out of the way, I’d like to say I totally agree with what you said about them dishing out big pay packets and bonuses because we live in a system that is driven by this and that a lot of the time they will justify war, poverty and discrimination to get it.
It’s not the people but the system. I really doubt replacing the current band of international CEOs with nicer ones will change much.
Here in the U.S. CEOs don’t even have to do a good job to get a big payout – many times that’s what companies do to get rid of someone doing a crappy job. What that means is that once you’ve reached that top-tier club you just can’t lose. I’d feel a tiny bit better about the huge pay disparity if it was based on competence.
Yeah, that happens a lot here too. The previous CEO of Macquarie Bank got paid out over $40 million dollars.
If pay was awarded based on competence and performance, workers would be out earning CEOs by a long shot because we’re the ones producing all the wealth.
[...] Under Howard’s new plan I’ll get an extra $17 a week (on $36,000 per year) and Allan Moss, CEO of Macquarie Bank will get $19,000 a week extra (on $33,000,000 per year!) – and that’s not counting the amount of tax the bastard will undoubtedly dodge. [...]
[...] As most of you know, CEOs and their excessive salaries and bonuses rile up a particularly high level of anger in me, like when Allan Moss received a salary of $33 million in 2007. [...]