Posts tagged "Pierre Moscovici"

Nationwide scales up on executive pay

Some top executives are earning 80 times the average Nationwide salary; time to look to at what France is doing

Nationwide building society’s latest report and accounts reveals that five directors are now paid over £1m a year. One, Tony Prestedge, saw his pay packet jump 15% at a time when branch staff got a 4.4% rise. The boss, Graham Beale, saw his package rise by £290,000 to £2.25m, including a £976,000 performance bonus. Yet profits at the society are down considerably – from £317m to £203m – partly because it has shelled out £103m for mis-selling PPI. Loans to customers are lower than they were three years ago. Savings balances have shrunk since then. Average staff pay has only inched ahead since 2009, yet Beale’s pay has rocketed 45%.

Nationwide is keen to point out that Beale’s pay package is less than half the average for a chief executive of a FTSE 100 company, the increase this year is partly down to technical changes in pension arrangements, and that if we compared with 2007, his pay is up only 20%.

Yet to see five directors of the largest mutual building society scoop £1m-plus payouts at a time of widespread austerity and belt-tightening will stick in the craw of the society’s 7 million customers and, for that matter, most Nationwide staff.

Nationwide’s annual report is full of justifications for executive pay; everything is carefully benchmarked, there’s a remuneration committee that supervises salaries and bonuses, and outside consultants who advise whether it’s in line with industry norms. In other words, the usual set-up that has allowed executive pay to spiral out of control. Beale now earns something like 80 times the average pay of a worker at Nationwide, yet the society can contrive that he’s underpaid compared to his peers in the finance industry. Interestingly, the executives who attend Nationwide’s remuneration committee meeting themselves enjoyed a bumper increase in their fee for carrying out this arduous task – up from £4,000 in 2011 to £10,000 in 2012. When the people who set the salaries themselves win a 150% increase in one year it may help explain why they are happy to vote through rises elsewhere.

To be fair to Nationwide, it was about the only major financial institution that didn’t fail in 2008. It carried on lending when others withdrew. It stood by its low base mortgage rate policy, whereby borrowers pay just 2.5% on their home loans. It has industry-beating service standards, with customer complaints far lower than competitors.

Would the society have performed less well if its boss was only paid 50 times the salary of his average worker? Or for that matter, 20 times? In France, new finance minister Pierre Moscovici has declared a crusade against executive pay at state-controlled companies, describing a wage cap of €450,000 (£365,000) a year for bosses as a matter of “justice and morality”. New president François Hollande plans to limit executive pay to 20 times the lowest paid worker’s salary. They say pay of £365,000 is no deterrent to recruiting talent, and they’re probably right.

But unlike most battles against excessive corporate pay, at Nationwide it’s different. This week the society sent its members voting forms to approve (or not) the director’s remuneration report. Don’t chuck them in the bin, as most people do. You can, for once, make a change. Vote!


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Posted by admin - June 23, 2012 at 10:11

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French finance minister says cap on top pay is ‘moral issue’

Pay squeeze delivers on a campaign promise by France’s Socialist president François Hollande

France’s finance minister has declared a crusade against executive pay at state-controlled companies, describing a wage cap of €450,000 (£365,000) a year for bosses as a matter of “justice and morality”.

Pierre Moscovici said the pay squeeze would come into effect over the next two years and deliver on a campaign promise by France’s new Socialist president, François Hollande, who sought to tap into widespread public anger over executive salary packages

“Earning €450,000 a year doesn’t seem to me a deterrent if we want to have quality men and women at the head of our companies,” said Moscovici. He added that the measure was needed to “make state companies more ethical” and respond to “the demands of justice and transparency” at a time of economic crisis.

The government expects to publish a decree on the pay cap next month. Turning the screw on executives, it will then introduce a bill in parliament later in the year to address stock options, so-called “golden parachute” clauses and other components of executive salary packages.

The limit will apply to all companies in which the state holds majority ownership, including the postal service, nuclear power giant Areva, electric utility EDF, railway company SNCF and public transport operator RATP.

Hollande set clear limits on executive pay on the campaign trail, saying no executive at a state company should earn more than 20 times the lowest-paid worker’s salary. Fewer than 20 executives currently have salaries over the limit, the finance ministry said.

“I’m convinced the strict salary framework at public companies will inspire the stabilisation of certain practices in the private sector,” Moscovici said, promising that all salaries for top executives at state firms would now be made public.

The UMP, the party of former president Nicolas Sarkozy, dismissed the cap as political posturing. “It’s a campaign promise. They’re pretending to fix our problems by reducing executives’ salaries. It falls under the category of ‘ostentatious morality’,” said UMP leader Jean-François Copé. “They make the French people believe they are fixing the problems with the budget and the economy by reducing the salaries of our country’s executives. It’s extremely hypocritical. This doesn’t fix anything.”


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Posted by admin - June 14, 2012 at 08:44

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Hollande’s finance minister says €450,000 pay cap ‘matter of justice’

Pierre Moscovici said the pay squeeze will come into effect over the next two years and delivers on a campaign promise by France’s new socialist president François Hollande

France’s finance minister has declared a crusade against executive pay at state-controlled companies, describing a wages cap of €450,000 a year (£362,000) for bosses as a matter of “justice and morality”.

Pierre Moscovici said the pay squeeze will come into effect over the next two years and delivers on a campaign promise by France’s new socialist president François Hollande, who sought to tap widespread public anger over executive salary packages

“Earning €450,000 a year doesn’t seem to me a deterrent if we want to have quality men and women at the head of our companies,” said Moscovici. He added that the measure was needed to “make state companies more ethical” and respond to “the demands of justice and transparency” at a time of economic crisis.

The new government expects to publish a decree on the pay cap next month. Turning the screw on executives, it will then introduce a bill in parliament later in the year to address stock options, so-called “golden parachute” clauses and other components of executive salary packages.

The limit will apply to all companies in which the state holds majority ownership, including the postal service, nuclear power giant Areva, electric utility EDF, railway company SNCF and public transport operator RATP. Hollande set clear limits on executive pay on the campaign trail, saying that no executive at a state company should earn than 20 times the lowest-paid worker’s salary. Fewer than 20 executives currently have salaries over the limit, the finance ministry said.

“I’m convinced that the strict salary framework at public companies will in time inspire the stabilisation of certain practices in the private sector,” Moscovici said, promising that all salaries for top executives at state firms would now be made public.

The UMP, the party of former president Nicolas Sarkozy – who lost to Hollande in last month’s presidential run-off election – dismissed the cap as political posturing. “It’s a campaign promise. They’re pretending to fix our problems by reducing executives’ salaries. It falls under the category of ‘ostentatious morality’,” said UMP leader Jean-Francois Cope. “They make the French people believe they are fixing the problems with the budget and the economy by reducing the salaries of our country’s executives. It’s extremely hypocritical. This doesn’t fix anything.”


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Posted by admin - June 13, 2012 at 20:10

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