Paying The Price For Top Bosses

You may have already noticed this, but our economy and yours are in a bit of trouble. Even the biggest corporations can go to the wall, even the most loyal worker goes on the dole.

Seems strange that I should bother to make that statement of the obvious, doesn't it? I only do so because there is one sector of our economic structure which does not seem to have realised that times are hard. I'm talking about those at the top of the tree -- the boys and sometimes girls -- well mostly boys to be honest -- who run this country's biggest corporations.

Now these firms have been suffering here as they have in America. The index of Britain's biggest 100 corporations lost 30 percent of its value last year, and even the best of them are lucky to make any profits at all.

Yet the CEOs of these corporations took average INCREASES in their salaries of seven percent. They now earn an average of four and a quarter million dollars a year.

We have a bank boss due to receive free shares worth 200 percent of his salary as an incentive. We have another telecoms boss who resigned after profits disappeared and costs ran out of control. His reward -- a 2.6 million dollar golden goodbye. We have housebuilding executives who supervise sales of houses DOWN by 50 percent -- and then take 55 percent bonuses on their salary.

Even when shareholders rebel -- as they have recently at Shell and BP -- they find that the vote is advisory. No one at the top has to listen. Big business, I fear, is run on the principle of greed.

And in the same way that big banks fail, so will big business. Our corporations -- the life blood of our nations --are too often run by people who stay for just a few years, who go for quick fixes and quick deals to make a quick profit -- who employ a legion of consultants to dress up their deals as a strategy -- who walk away with a wallet bulging with cash, leaving behind a company struggling with debt.

Sounds old fashioned, but we really need shareholders who truly own and control corporations. We need bosses who plan for the long term and accept the responsibility that goes with their power. In short, capitalism without control isn't working.
By Peter Allen
  • CBSNews

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