Wealth-Envious Bullshit

Apparently, some financial “experts” in Britishland have taken exception to the massive bonus paid out to a company’s executive chairman:

One of Britain best-paid female bosses has been slammed by critics over a £29million bonus.
Avril Palmer-Baunack runs British Car Auctions, which owns We Buy Any Car, the car-buying website known for its catchy jingles.
On top of the £29 million bonus, which is linked to an increase in the share price, she also got an eight per cent increase to her basic salary to £525,000. The company defended it by saying it needed to pay a ‘competitive’ rate.
But in a report to investors, influential advisory firm Glass Lewis called the £29 million payout to Palmer-Baunack ‘exceptionally disproportionate’.

…and needless to say, the politicians want to get in the game:

Last year, Theresa May announced plans to censure stock market-listed firms who drew exceptional levels of complaints from shareholders over bosses’ pay.

There is just one problem with all of this outrage:  it’s total bullshit.  Here’s why (from the article itself):

The vast sum, 59 times her normal salary, is the result of an incentive plan drawn up four years ago to grow the firm.

In other words, four years ago the board of directors told the CEO that if she managed to grow the company’s value by x, she would be paid y.  (And I should also point out that this incentive plan would have required a formal agreement from the shareholders — the same shareholders who are now bitching about the thing — before being implemented.)

Well, that’s exactly what our Avril did, so she has to get paid the bonus.  (The size of the bonus is irrelevant, because it was obviously based on a sliding percentage driven by the amount of growth.)

Of course, the trolls at Glass Lewis don’t see it that way, because (and once again from the article):

[Glass Lewis] said the increase in the value of BCA may have been boosted by broader swings in stock market prices ‘rather than company or management performance’.

Well, guess what?  “Broader swings” in the stock market are a result of shareholder confidence in the market’s activities and results — and if the company and its boss benefit from that, it’s called “good luck”.  I should point out once again that if the market is tanking and it takes a company down with it — through no fault of the company boss, mind you — the boss may well get fired anyway because at the end (and please note this, because it’s important), executive management is responsible for one thing, and one thing only:  growth in the value of the shareholders’ investmentHow it gets there is irrelevant (except in the Land Of Wealth Envy).  When they say, “The buck stops here”, that’s precisely what it means:  the ultimate responsibility for shareholder value lies with the executive manager, and with this comes either termination or reward, as agreed by the shareholders.

All the other guff about Palmer-Baunack being a female executive, incidentally, is just smoke — her sex is completely irrelevant, as it should be.  Then there’s this:

The vote on the pay report is only advisory so, if Palmer-Baunack feels able to shrug off criticism, she will be allowed to keep the lot.

Let’s hope the woman has an iron nerve (which she seems to have, by the way), and tells all the wailers to fuck off.

Palmer-Baunack, who has a grown-up son and daughter and is married to a German executive at Volkswagen, previously defended her £7.1 million pay packet for 2015 by saying: ‘Anyone who says they don’t want money is talking bullshit. We all want to earn money for our family.’
The Edinburgh-born executive, 54, has been vocal about women in the workplace in the past. She once said she was ‘very cynical’ about the existence of ‘glass ceilings’ – the term used to describe the limits on the career opportunities for women in big corporations.

Considering that she started off as an agent for a car rental company, I think she’s proved her point.

And if the wailing gets too much, she should really tell them all to get stuffed by taking her £29million bonus and going off to live in Switzerland, Monaco or the Caymans, beyond the reach of the would-be wealth confiscators.

Good luck to her, say I.


  1. They’re not talking about GB’s confiscatory tax rate which is now at least 50%, before the fees for national health insurance and value added tax.
    By the time the tax men are done with her millions of pre-tax income, she’ll be lucky to have one third of it left to party with.

  2. IIRC, the tax rate in Britland for ultra high earners was about 95%.
    Isn’t that why Clapton and Lennon et.al. left Jolly Old some years back?

  3. And Kim, as I’m pretty sure you’ve said before, termination at that level can and usually does mean 1-3 years (if ever) before you’ll be offered anything comparable. That means you better have the cushion banked.

  4. Take the money and run (there is a song there somewhere). Then the board, guided by the shareholders demands, for a less greedy CEO, can choose a replacement who runs the company in the ground. This is known as bad luck.

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