Limit Top Pay to 20 x Pay of Lowest Paid Employee
I am concerned by rising excessive Executive pay and the falling salaries of the lowest paid in the same organisations, both private and public.
The solution is for Parliament to pass a Bill limiting the maximum pay in any Organisation in the UK, both Private and Public, to 20 times the pay of the lowest paid employee in the same organisation.
Started 98 weeks 0 days ago
I can't see this working I'm afraid. Government can't be effective in this manner as the majority of people at the top get paid in shares which isn't classed in this and doesn't work.
Also it is much better to tax the wealthy in the country than try to limit pay in companies. Currently you only have to pay at most 20% tax on earnings as once you start earning lots you pay coperation tax not PAYE which is a lot less and never gets to the 50p tax rate unless you work in the public sector.
Treat shares as part of their renumeration package and the people at the top cannot get round the limit. By applying a maximum salary based on a multiple of the lowest paid, not only will it cut the rise in excessive top pay but will be more effective than the minimum wage in rincreasing the wages of the lowest paid and reversing the rise in UK wage inequality.
Pushing up taxes will only lead to the top paid pushing up their renumeration to compensate for the higher taxes, leading to greater costs for the companies and so typically in some companies more cost cutting lower down the pay scales, leading to pay cuts and/or job losses. Higher taxes on the upper earners will be of no help to the low paid at all.
It still won't work, the minimum wage is at £6.08 per hour doing 40 hours a week for a full year gets you just over £12,500.
Therefore you suggest a limit at the top of only £250,000 (20 x £12,500) .
I'm sorry but this kind of rule would never be applied and doesn't do justice for some people and the work they do. All it would lead to is removing all the high paid people and businesses from the country to somewhere else and with that all their spending power and jobs they support.
You can only tax them then ensure it is given to those most in need which should also be limited.
If I was to set-up a business that employed 50 people and made £15 million a year in profits are you suggesting I would be hapy to take £250,000 a year when I would be getting a lot lot more under the current systems and would of put all the work and effort in the first place to set it up? What if I'm charge of BP and made Billions in profit???
"... only £250,000" !
Where is the evidence to support the claim all these self serving, excessively overpaid individuals are both worth their inflated remuneration packages and are not very easily replaced by other, more lower paid individuals in the same companies they work?
You may be thinking of companies owned by shares on the stock exchange but that still will never work.
What if my own business was to take off after 10 years of hard work on my part for little pay if I owned and built the company I would get to chose how much to pay myself and if it made millions in profit I'd want to keep a good share of that to myself. Sorry but that is how business and the world works.
Your ideas would only work if every country in the world adopted them or all that would happen is every company would be based somewhere other than the UK and nobody would start up any new companies creating massive job loses to those at the bottom.
I know of companies that poeple have set-up over 20 years and now will probably take home more than £250,000. This is a reward for all the hard work and creating a business that employes 50 workers.
There is a clear difference between working for a company as many of the top paid do and owning a company, either by building it up or buying shares in it. I am not suggesting a change to how owners may take a portion of the business net profit directly or as share dividends, it is those who work for the business who have the limit set.
Also by your reasoning all UK companies should already be leavinging the UK for the cheaper costs and reduced regulation of the developing and third world, and yet they are not.
I personally think more prosperous organisations and thus more jobs will be generated by the cash saved from reduced top pay, as well as better productivity in the businesses that arises from improved morale.
I always remember the huge bad feeling and drop in morale that arose in a business I used to work for when the workforce agreed to take a pay freeze then the senior executives rewarded themselves with a 75% pay rise. I cannot think of a better way to disincentivise a workforce than by such inequality.
Simply taxing the top paid more will lead to
1. Even higher salaries to compensate for higher taxes, which will reduce the business productivity by higher costs and more importantly lowering workforce morale,
2. The high paid will use their increased salaries to pay for very good accountants to find them tax loopholes and exemptions or pay very good lobbyists to push for introducing new tax loopholes and exemptions.
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