Business Soapbox: Kim Johnston
"People at the top end of the corporate ladder deserve a big salary if they are doing a good job at this difficult time"
There has been much talk recently about the seemingly high levels of executive pay. The High Pay Commission, an independent inquiry into top pay in the private sector, has unearthed some shocking statistics. Apparently, executives have enjoyed pay increases of nearly 5,000% over the last 30 years.
I have read that in the case of Barclays Bank, pay at the top of the ladder is approximately 75 times that of the average worker.
I'm going to risk being a little controversial here. If the person is delivering exceptional results then I don't see why they shouldn't receive a salary in line with their performance levels. If someone is doing a difficult job well, and particularly during a challenging time, then they should be paid according to the value they add to the marketplace and rewarded for their productivity.
The real problem lies in the regulation of high pay. Not all of those who get it, deserve it. It's corporate governance that should be examined as a matter of urgency.
Firms with boards must have a credible remuneration committee, rather than cosy teams made up of a company's own directors acting in their own personal interests without outside input. Certainly it's a challenge to ensure pay is directly related to performance, especially at a time when an increasingly globalised marketplace equates to global defined salaries. When it comes to pay at the top, something has to give. But it shouldn't be to the detriment of those who deserve their salary, people doing a job well, and achieving results throughout.
In my line of work, I often meet companies who struggle to find the right person to fill senior postings. They're right to take it seriously and hold out for the right person, as it's people and talent that will allow them to survive in this downturn. When a company finds someone with the right skills, experience and personality, to enhance their performance, paying them accordingly is only fair.
Kim Johnston is managing director of Kim Johnston Executive Search