Wednesday, January 25, 2012

Pure greed

Another day, another excessive local body payrise, this time for Kapiti Coast District Council CEO Pat Dougherty, who scores himself an extra $44,000 a year, an increase of 18%. As with the business sector, this excessive payrise isn't driven by any improvement in performance; under Dogherty KCDC has faced large blowouts on major projects, and is looking at a 12% rate rise to fund those shortfalls. Instead, its just pure greed, a way of keeping score. And at a time when ordinary people are looking at nil or sub-inflation wage rises, and so falling behind, it is simply unacceptable.

This greed on the part of local body management, this belief that their salaries should be compared to the private sector, has to stop. They are public servants, not corporate warlords. More generally, the culture of high executive pay needs to end. The total disconnect between pay and performance makes it clear that these people don't earn their inflated salaries. Neither are they "compensation" for higher risk; its not CEOs who are on 90-day trial periods, subjected to random restructurings, and sacked because their boss comes in hung-over in the morning. Instead, its just pure greed, a way of keeping score. In the process, they boost inequality, distort perceptions of worth and value, and fleece their shareholders of returns. Over in the Guardian, George Monbiot proposes a maximum wage, which can be trivially enforced by setting a 100% marginal tax rate above a certain level. And that is beginning to look like a very good idea.