Don't blame Sir Fred - blame capitalism

No this is not a piece of Marxist propaganda. I am a firm believer in the mixed economy and capitalism with rules. I don't believe a completely socialist system works for long simply because it takes no account of human greed and competitiveness. And while greed might be an unwholesome quality, it does provide an incentive which reliance on public spiritedness does not.

But it has to have rules and principle and common sense. Qualities sadly lacking in the contractual deals involving executives in Britain's most powerful companies. We have Sir Fred Goodwin, former Chief Executive of the humiliated Royal Bank of Scotland refusing to pay back any of his pension of £693,000 pa despite having presided over the worst performance in British banking history. But why should he? He has lived a lifestyle that paid him £4 million per annum during his tenure at RBS where he feels he simply took high risk decisions that failed. His pension was part of his contractual deal and he sees no reason to apologise for it.



I can understand why. We have allowed a situation to develop where top executives in this country have paid themselves obscene amounts of money for years and there is nothing to stop them. I have figures only as recent as 2006 but in that year a relatively unknown British executive with a very down to earth name, Mick Davis of Xantra Mining, was paid a mind-boggling £15 MILLION per annum plus added benefits and an index linked pension. Lord Browne of BP earned over £1 million as did Tesco boss Sir Terry Leahy and Charles Allen, former head of ITV.

But if you don't need that kind of money to live a decent lifestyle just get yourself into the right gentlemen's clubs and get recommended as a non executive chairman. Back in 2006, the average pay for these guys was £270,000 for two days work a week. Sir John Sunderland of Cadbury-Schweppes managed to clock up 3.5 million in that year plus share options of £2million for his two days a week.

Then, of course, there are bonuses. Back in my day, bonuses were an exception. They were paid for exceptional and tangibly measurable work. Now they are built in to the 'fat cat' salary structure. In 2006, only 4 Chief Executives on the FTSE top 100 failed to take a bonus as part of their 'package' and there is no legal requirement to show how bonuses are 'earned'

Now here are some figures. In 2006, bonuses made up a staggering £19 BILLION of the amount paid out in the United Kingdom. Here's an evening more staggering figure - £10 BILLION - or over 50% - was paid out to the Financial Services industry (surprise, surprise) - the very people who have landed us in the bloody mess we are in now.

Well at least we do recognise who has landed us in the bloody mess we are in now. The finger is usually pointed at the trade union movement and the total amount involved in a settlement for thousands of men and women who can only fantasise about the lifestyles - and paid deals - of some of their bosses!!