Do Ministers deserve the pay they get?

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<TABLE cellSpacing=0 cellPadding=0 width="100%" border=0><TBODY><TR>Do CEOs deserve the pay they get?
</TR><!-- headline one : end --><TR>Salary culture varies from country to country </TR><!-- show image if available --></TBODY></TABLE>




<!-- START OF : div id="storytext"--><!-- more than 4 paragraphs -->Mention chief executive pay these days and it is likely to elicit a strong emotional response, for this has become a hot-button topic both at home and overseas.
The financial crisis has resulted in increased public scrutiny of CEO salaries, with calls to remove the excesses seen in certain countries in recent years.
This spotlight has largely been cast on the United States - the epicentre of the crisis - but has also spread to other countries.
CEO pay has been most controversial in the US, with huge public outcry over the fat packages paid to head honchos who failed. Thankfully, austerity is slowly returning to the boardrooms in the wake of the crisis.
In Britain, there has been a rise in bonuses and share option schemes. Top executives there earn more than 100 times the average pay of workers.
Over in Japan, CEOs are more modestly paid relative to their Western counterparts. There is also little correlation between pay and profits, but in bad times, they have less worry about being sacked.
In Singapore, the pay culture is more moderate compared to the American model, and is more akin to the European system.
This means it is more conservative with relatively less equity-based rewards.
Indian CEOs are among the best-paid after adjusting for purchasing power parity, amid calls for moderation in a nation with extreme poverty.
In China, CEO pay is not as widely disclosed compared to other countries.
We look at how CEOs in several countries are rewarded.
Alvin Foo

 

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<TABLE cellSpacing=0 cellPadding=0 width="100%" border=0><TBODY><TR>April 5, 2009
BRITAIN
</TR><!-- headline one : start --><TR>Big bucks despite big failures
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Bankers like Barclays' Mr Bob Diamond (left), and former RBS chief Fred Goodwin (next picture) have attracted the most anger in Britain for corporate greed.
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<!-- START OF : div id="storytext"--><!-- more than 4 paragraphs -->Performance-related bonuses and share option schemes have enabled company chiefs - and plenty of their underlings too - to multiply salaries severalfold.
Before the crash, the average salary for an FTSE 100 chief executive was around £800,000 (S$1.8 million), but total earnings were more than four times that once incentives and share options were added.
<TABLE width=200 align=left valign="top"><TBODY><TR><TD class=padr8><!-- Vodcast --><!-- Background Story --><STYLE type=text/css> #related .quote {background-color:#E7F7FF; padding:8px;margin:0px 0px 5px 0px;} #related .quote .headline {font-family: Verdana, Arial, Helvetica, sans-serif; font-size:10px;font-weight:bold; border-bottom:3px double #007BFF; color:#036; text-transform:uppercase; padding-bottom:5px;} #related .quote .text {font-size:11px;color:#036;padding:5px 0px;} </STYLE>S$44.6m
That's how much Barclays director Bob Diamond netted in salary and share plan payouts last year.



</TD></TR></TBODY></TABLE>These figures have doubled over the past five years as the best companies seek to recruit the best international talent.
It is these perks, rather than the company jet or the penthouse suites, that have really infuriated the country as it enters a recession that many blame on corporate greed.
By some calculations the financial sector paid itself almost £4 billion in bonuses in February, despite the critical state of many institutions.
Mr Peter Mandelson, the Business Secretary, summed up the prevailing order when he said: 'Obviously you have to work in a market, you've got to recruit the best people and keep the best people in place and motivate them.'
Typically, large British companies have functioned along a 'pyramid' pay scheme with a few dozen extremely well paid individuals at the top and a large cadre of employees earning more modest salaries. Britain's richest executives earn more than 100 times the average salary (around £25,000).
Legendary examples include Mr Jean-Pierre Garnier, chief executive at GlaxoSmithKline until recently, who earned almost £16 million last year, more than 80 per cent of which was in share plans and bonuses; and Mr Bob Diamond, Barclays best-paid director, who last year netted close to £20 million in salary and share plan payouts.
It is bankers like Mr Diamond who have attracted the most anger in Britain at what is perceived to be excessive remuneration in return for poor company performance. The most vitriol has been reserved for Sir Fred Goodwin, until recently chief executive of Royal Bank of Scotland (RBS), who earned more than £4 million in 2007, including a £2.9 million bonus.
RBS has subsequently been part-nationalised by the state, and a furore erupted when it emerged that taxpayers would be funding a £17 million pension pot for a man who presided over the virtual bankruptcy of his institution.
Yet other large corporations with shaky business models think little of paying fat salaries to chief executives, arguing that the only way to secure talent is to pay handsomely for it.
Channel 4, a broadcaster struggling to maintain its independence amid financial losses, paid its chief executive Andy Duncan £670,000 last year.
Elsewhere there are signs of relative austerity. At GSK, MrGarnier's replacement, Mr Andre Witty, is to be paid a fraction of what his predecessor earned - a base salary of £1 million, with share awards on top. Vodafone's new chief executive Vittorio Colao is in line for an annual basic salary of £975,000 compared to £1.3 million for predecessor Arun Sarin. And BP chief executive Tony Hayward earned £2.5million last year - about half the pay enjoyed by Lord John Browne in his BP heyday.
Mark Rice-Oxley
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