So you think some salaries are too high? Just how high is too high, then?

I am not suggesting that £3m a year is not a lot of money..

I’d like to start this piece with two disclaimers. First, this is not intended as a justification of large remuneration packages for executives. Second, nor is it an article saying it’s right that someone earns 100 times what someone else does. But this is an article attempting to look at the other side of the debate. And it is written from a personal perspective, as an observer of the debate. This is not a headhunter trying to curry favour with their client base, or justify fee increases

We have to make a choice in this country. We either pay market-rate salaries and give ourselves the best chance of employing superb people, or we rely on extraordinary people deciding to do a job for far less than they could earn somewhere else. The only other option is to accept that paying below market rate gets us the equivalent employees. Large shareholders are comfortable with the first option.

I wrote the above in 2012. It was for an article defending Stephen Hester’s right to take a bonus where the criteria attached to it had been set three years before, where he had hit the criteria needed to trigger a bonus and where he was not receiving a full bonus because he had not hit every criteria. But people in positions of mass influence decided that this was unacceptable and we all know what happened then.

Yes, I am a headhunter writing in support of people being paid large salaries, and I know how it might look. But that does not change the fact that the first paragraph holds true. It might be worth me explaining why I believe this is so high profile now, and why taking an insular view will impact our competitiveness in the future.

I think anyone earning £1m a year or more is earning a very large amount of money. These sums are not trivial. I’m also conscious of the other argument against large salaries, namely how a banker compares with a nurse in terms of earnings and impact on society. I write this as the son of a teacher.

The challenge is that a vocational role will always be rewarded on the basis that most people doing it will do it for the bare minimum. In a capitalist world, if you can’t show the financial effect of your work, you can’t argue for a percentage of it. Again, this is an oversimplification but worth bearing in mind.

People leading businesses have always earned substantial sums of money. While there have been grumbles about this over the years, there has never been the sort of public outcry we are seeing now. So why is this? Well, I am reminded of an episode of Have I Got News For You several years ago. There was, for the time, the usual piece about MPs’ expenses.

One of the guests was Reginald D Hunter, the American comedian. After listening to the four British people on the panel for ages, he asked a few questions – the gist of which was “has this just started or has it been happening for ages?”.

Upon hearing that it had been happening for ages, he questioned whether the public outrage was a recent development. When the answer was “yes”, he basically said: “So, what you are telling me is that when everyone had enough money no-one cared about what the MPs were doing, but now the economy is in trouble, and people have less money, everyone cares?”

I feel the argument about remuneration does the same. If we are not careful we will start to hurt this county’s ability to ensure the finest people globally are running our enterprises. And that can’t be good for everyone.

But it’s when you turn to the numbers themselves that you hit an issue. Simplistically, how do you define what number is too big? You can look at multiples of the average national salary, or the average salary within an organisation. You can look at what feels morally like too big a number. Or you can make a comparison to what the prime minister earns. Or, as one Sunday paper did, to what the Archbishop of Canterbury earns. These are all arbitrary parallels. And none of them factor in that we work within a global context that continues to feel far smaller.

If we want the UK corporate world to play on a global stage and win, and offer an environment that global enterprise wants to trade with and work within, then we have to operate on that basis. That means we need a tax structure that the world is comfortable with, an employment environment businesses can work under and a remuneration system that encourages the world’s best talent to view the UK as a good place to do business in.

If you are a business person able to work globally and you are sought after, you can choose where you work and which organisation get the benefit of your experience and ability. Your first choice is likely to be a business based in the US. If you deliver, you can earn £200m over five years and be feted as a wonderful human. Your second choice is a UK-based business. If you deliver you can earn £15m over five years and be vilified in the press on an annual basis.

To be clear, I am not suggesting that £3m a year is not a lot of money. It’s a fortune. But when taken in context, against the global market place businesses work in, in the competitive world we all work in, factoring in the rewards paid to other executives in different countries, it does not look quite so outrageous.

If the large shareholders are comfortable paying global market-rate salaries, maybe its time the press and the public were, too.

Mark Freebairn is partner and head of the Financial Management practice at Odgers Berndtson

This article first appeared on economia

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Winning Scottish independence will be even harder than before - but it may be the only choice

Independence campaigners will have to find answers on borders, currency and more. 

The Brexit mutiny has taken not just the UK economy and its relationship with Europe into uncharted waters. it has also imperilled the union between Scotland and England. From Sir John Major to the First Minister, both Unionists and Nationalists had warned of it. The outcome, though, has made this certain. The Leave vote in England and Wales contrasted with an overwhelming Remain vote north of the border.

That every region in Scotland voted to stay In was quite remarkable. Historically, fishing and industrial communities have blamed the European Union for their woes. That antagonism was probably reflected in lower turnout - an abstention rather than a rejection. 

The talk now is of a second referendum on independence. This is understandable given the current mood. Opinion polls in the Sunday Times and Sunday Post showed a Yes vote now at 52 per cent and 59 per cent respectively. Moreover, anecdotal evidence suggests even arch No vote campaigners, from JK Rowling to the Daily Record, are considering the option.

The First Minister was therefore correct to say that a second referendum is now “back on the table”. Her core supporters expects no less. However, as with the economy and Europe, the constitutional relationship between Scotland and England is now in uncharted seas. Potential support for independence may be higher, but the challenges are arguably bigger than before. The difficulties are practical, political and geographic.

Of course the Little Englanders likely to take the helm may choose a velvet divorce. However, given their desire for the return of the Glories of Britannia that’s improbable. They’re as likely to wish to see Caledonia depart, as cede Gibraltar to Spain, even though that territory voted even more overwhelmingly In.

Ticking the legal boxes

Practically, there’s the obstacle of obtaining a legal and binding referendum. The past vote was based on the Edinburgh Agreement and legislation in Westminster and Holyrood. The First Minister has indicated the democratic arguments of the rights of the Scots. However, that’s unlikely to hold much sway. A right-wing centralist Spanish government has been willing to face down demands for autonomy in Catalonia. Would the newly-emboldened Great Britain be any different?

There are no doubt ways in which democratic public support can be sought. The Scottish Government may win backing in Holyrood from the Greens. However, consent for such action would need to be obtained from the Presiding Officer and the Lord Advocate, both of whom have a key role in legislation. These office holders have changed since the first referendum, where they were both more sympathetic and the legal basis clearer. 

Getting the EU on side

The political hurdles are, also, greater this time than before. Previously the arguments were over how and when Scotland could join the EU, although all accepted ultimately she could remain or become a member. This time the demand is that Scotland should remain and the rest of the UK can depart. But will that be possible? The political earthquake that erupted south of the Border has set tectonic plates shifting, not just in the British isles but across the European continent. The fear that a Brexit would empower dark forces in the EU may come to pass. Will the EU that the UK is about to leave be there for an independent Scotland to join? We cannot know, whatever European Commission President Jean-Claude Juncker may be saying at the moment. The First Minister is right to start engaging with Europe directly. But events such as elections in France and the Netherlands are outwith her control. 

Moreover, currency was the Achilles heel in the last referendum, and hasn’t yet been addressed. George Osborne was adamant in his rejection of a currency union. The options this time round, whether a separate Scottish currency or joining the euro, have yet to be properly explored. A worsened financial situation in the 27 remaining EU members hampers the latter and the former remains politically problematic. 

The problem of borders

Geography is also an obstacle  that will be even harder to address now than before. Scotland can change its constitution, but it cannot alter its location on a shared island. In 2014, the independence argument was simply about changing the political union. Other unions, whether monarchy or social, would remain untouched. The island would remain seamless, without border posts. An independent Scotland, whether in or out of the EU, would almost certainly have to face these issues. That is a significant change from before, and the effect on public opinion unknown.

The risk that's worth it

Ultimately, the bar for a Yes vote may be higher, but the Scots may still be prepared to jump it. As with Ireland in 1920, facing any risk may be better than remaining in the British realm. Boris Johnson as Prime Minister would certainly encourage that. 

David Cameron's lack of sensitivity after the independence referendum fuelled the Scottish National Party surge. But perhaps this time, the new Government will be magnanimous towards Scotland and move to federalism. The Nordic Union offers an example to be explored. Left-wing commentators have called for a progressive alliance to remove the Tories and offer a multi-option referendum on Scotland’s constitution. But that is dependent on SNP and Labour being prepared to work together, and win the debate in England and Wales.

So, Indy Ref The Sequel is on the table. It won’t be the same as the first, and it will be more challenging. But, if there is no plausible alternative, Scots may consider it the only option.

Kenny MacAskill served as a Scottish National MSP between 2007 and 2016, and as Cabinet Secretary for Justice between 2007 and 2014.