The Shareholders Rebelling against Excessive Boardroom Pay Were Not a Mob, Consumed by the "Politics of Envy", but Mostly Elderly People Who Generally Approve of Capitalism. (the Business)

By Hosking, Patrick | New Statesman (1996), May 5, 2003 | Go to article overview

The Shareholders Rebelling against Excessive Boardroom Pay Were Not a Mob, Consumed by the "Politics of Envy", but Mostly Elderly People Who Generally Approve of Capitalism. (the Business)


Hosking, Patrick, New Statesman (1996)


Is it lust me, or is that cobwebby old cliche "the politics of envy" being wheeled out rather a lot lately? Apologists for fat cats -- meaning the rapidly expanding army of remuneration consultants -- love this phrase. It can be applied to anyone who opposes undeserved bonuses or pay-offs for failed executives. The world can be turned on its head with the expression. It's not the unprecedented greed of a few hundred company directors that is the problem, apparently, but the mean-spirited envy of everyone else.

Leader-writers on the Financial Times have taken up the theme, accusing some shareholders of "playing to the gallery" in the current flood of protests over boardroom excess. "It is important that the politics of envy does not intrude on this," they opined. "High-flying business people are entitled to multimillion-pound packages."

Entitled? Says who? Has [pounds sterling]2m a year -- which is what I understand by a multimillion-pound package -- suddenly become a human right for blue-chip chief executives , alongside clean air and trial by jury? The FT is right only if it really means the stars, the tiny minority who genuinely create value, not the vast majority who muddle through. And if the bear market of the past three years has taught us anything, it is that there are very, very few Beckhams in the boardrooms of corporate Britain.

Actually, "politics of envy" utterly misrepresents the tone of most of the recent shareholders' meetings I have attended. Shareholders generally bend over backwards to see things from the board's point of view. They may be seething inwardly, but they remain unfailingly polite, to the point of deference. I watched amazed at the Abbey National meeting the other day as shareholders remained respectful of a board that had almost destroyed their company and their savings.

This was not a jealous mob, but mostly elderly Daily Telegraph and Daily Mail readers, disorientated by the realisation that the capitalism they generally approve of could be hijacked so shamelessly by a tiny elite. Six executives responsible for the shambles at Abbey had in recent months walked away with pay-offs respectively of [pounds sterling]1.lm, [pounds sterling]1.1 m, [pounds sterling]919,000, [pounds sterling]937,000, [pounds sterling]700,000 and [pounds sterling]817,000.

Of the 250 shareholders present, 245 voted against the resolution approving the bank's remuneration policy. On a show of hands, this was a rock-solid revolt. …

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