Thursday, 11 June 2009

Why top salaries keep going up

If you were born in 1954, as I was, it is bad enough to start feeling your age. It is even worse when you begin to identify with people for whom D-Day is still a vivid memory.

But that is exactly how I felt at dinner last week, when I met a man with a plan for a baffling new career. His mission is to become a Global Remuneration Planner, news that I greeted with the same sort of sympathetic understanding I expect to display if my son ever announces “Daddy, I want to be an actuary.”

“Never heard of it,” I said. “What does it involve?” And, amazingly enough, it proves to be all about planning people’s salary and benefits. On a global basis.

It came as news to me that any such industry existed, but if you are similarly ignorant do go to your favourite search engine and type it in. You will be directed to page after page of consultant-speak waffle on the subject, using long words and technical jargon to conceal in expensive magic what seems, on the face of it, a perfectly simple job.

Most of it, as you would expect, is about Them: the top executives who can move so readily across national boundaries and must be retained at all costs. Imagine how silly we would feel now if Adam Applegarth or Fred Goodwin had been poached by the Chinese.

Funnily enough, globalisation seems to work in favour of Them, driving senior executive remuneration up to the highest levels. While for the rest of Us mugs, it pulls in precisely the opposite direction. How can you expect to be paid a decent wage on a production line here when there are people in India prepared to do the same work for £25 a week?

When I asked what appealed to my friend about his new calling, he gave me a very simple answer. A former colleague, of whose talents he had no particularly high opinion, had already become a global remuneration planner for a major multinational and was earning a basic salary of £450,000. Plus a bonus, last year, of 80%.

I wonder who planned that particular remuneration package? And what are the chances of anyone in that position doing anything to narrow the ever-widening and increasingly dangerous gap between Them and Us?

Keith Hann is a financial PR consultant who has never become one of Them.

Originally published in The Journal, Newcastle upon Tyne.

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