On Fat Cat Pay the PM flunked it.
Flunked it!!?!!?!!!!
Yes. Here’s how.
President Truman’s catchphrase was: “The buck stops here”. With top pay the buck doesn’t stop anywhere. It ought to stop with the owners: the shareholders.
Cameron should have said: “Pay packages are the responsibility of the shareholders and no-one else. Find your backbones. Get it sorted.”
Yet his ‘big idea’ is to make shareholder AGM votes on Remuneration Reports binding not advisory: a milk and water step.
Even this gives the vapours to professionals with a vested interest. Step forward Liz Murrall of the Investment Management Association: “Shareholders don’t micromanage companies. That’s for management”. Right in the first part. Shareholders don’t micromanage companies: they own them!
The indications are that the government will make changes in the law too technical for the electorate to understand and which won’t have any bite. Exactly opposite to the Thatcher-Tebbit formula used successfully to curb union power in the eighties. Policy failure is round the corner.
“OK wise guy”, I hear you say, “So why is clever Cameron making this mistake?”
Look no further than the front of Monday’s FT: RBS executive in line for £4billion bonus.
The person in question is John Hourican, chief executive of (83% taxpayer owned) Royal Bank of Scotland Group’s global banking and markets division. Presumably the government see him and his boss, Stephen Hester, as key to returning RBS to profit. The big bonus will be nodded through.
The government is willing to exhort others but not willing to act itself.