Sunday, 20 October 2013

Well What Are We All Worth? Or, Show Me The Money.

Show Me The Bonus Money : Grafik Farm 2013
    Picking up the end of the month paycheck, we groan. We compute complicated and convoluted calculations of necessary expenditure, impossible savings, rocketing energy bills, definite debt increase and zero credit, likely loss and unlikely profit.

We are, apparently, 'the precariat'. Those crazy sods forced to walk that slender, economic tightrope month on month praying we are not made redundant meantime, have our homes repossessed, lose our relationships. Increasingly, in the new labour market of temporary contracts, part-time work and zero contract hours, we find it impossible to pay off household debts, student loans and/or car loans, or pay for a mortgage, and don't talk about putting extra aside for our pensions.

In an era when a wreckless mania for financial gain and a knee jerk resort to an ideological 'austerity' has thrown millions into unemployment, slashed the public sector and wages, attacked the welfare system and pensions, some have continued to pick-up gigantic salaries.

A select few, from the sector blamed for the financial meltdown of 2008 and our current economic difficulties, have hardly suffered a dollar difference in their astronomical salaries.

While some have been forced onto the dole queue after 40 years in some of the world's toughest industries and have to make do with a moderate pension and what little savings they might have (and will still have to look for work), Stephen Hestor, for example, will walk away from the Royal Bank of Scotland with £6 million ($9.7 million, €7 million) compensation for five years work? Nice handshake. But, then, maybe I am missing something?

What might explain the enormous compensation of people like Stephen Hestor, Jamie Dimon, Lloyd Blankfein, Bob Diamond and others when the vast majority of people are having such a hard time? Why in March 2009, after the American taxpayer had bailed the ailing company out to the tune of $85 billion (£52.5 million, €62 million) did AIG, gleefully offer $165 million (£102 million, €120.5 million) bonuses to its executives? AIG, let's remember, would have collapsed without the intervention of the state and taxpayers money.

Maybe there is something God-like and special about these Masters of the Cosmos?

In March 2012 it was announced that Barclays Bank then CEO Bob Diamond's compensation package for 2011 topped a staggering £25 million ($40.4 million, €29.5 million) an increase from the £20.7 million ($33.4 million, €24,4 million) he received in 2010.

So what, I wondered, did Mr Diamond do for a financial renumeration package 830 times the average worker's salary? Did he work 830 times harder than the rest of us, or, perhaps, he is 830 times smarter with an IQ of around 99,600?

Is his pay packet tied to the market for the labour he offers ( as some suggest, we have to pay these people intergalactic sums to get the right calibre of person for the job - stop laughing it's not funny it is what some will tell you). Is his performance 830 times better than the rest of us? Is it external forces such as demand and supply that is the magic 'kerching' to Bob D's bank account?

But here is where it gets tricky.

At the end of April 2012, and in the midst of aggressive protests from shareholders about the size of the bank's executive's salaries, Barclays Bank renumeration committee pressed ahead with plans to give hugely increased compensation packages to senior executives despite a 30 per cent drop in the share price and declining profits.

Jay Brookman of the Washington Post, October 4, 2011, offered the example of Amgen CEO Kevin Sharer. Having watched its margins drop by 3 per cent in 2010 and 7 per cent over the previous five years, Sharer presided over Amgen's loss or shrinkage of some the company's plants and 2,700 redundancies. Sharer's compensation package, however, moved from a massive $15 million (£9.3 million, €11 million) to a neat $21 million (£12.9 million, €15.4 million). Representing a raise of 37 per cent despite a drop in profits and the loss of workers.

But the one I like is where Dick Fuld had his salary and bonuses questioned by Henry Waxman, Republican, 30th District of California, at a House of Representatives' Committee On Oversight and Government Reform, October 6, 2008.

"Your company is now bankrupt, our economy is in crisis, but you get to keep $480 million(£297 million, €350.6 million)," Waxman said with more than a little incredulity in his voice.

Meantime, it hasn't stopped. As recently as September 2013, UK Chancellor George Osborne hired the 'cream' of British lawmen at £700 an hour ($1,131, €826.4), paid for by the British taxpayer to, wait for it, STOP the EU introducing banking regulation that would cap bankers' bonuses.

Are we all on drugs? Are they putting something into our water, coffee, tea?

'Yeah' the average British/American/European/Global citizen is heard to say in a Zombiefied voice, 'I am more than happy to pay good hard earned money to ensure the bankers' don't lose their bonuses.'

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