I have ended up writing quite a few articles about executive pay over the years. Like Michael Skapinker, I have heard this argument from many interviewees:
Why did senior executives believe they deserved to earn so much? “Because,” they said, paraphrasing the L’Oréal advertisement, “we’re worth it.” A war for talent was raging. If you paid peanuts you got monkeys.
As Skapinker says, this way of thinking doesn’t really work any more.
The problem, as is now clear, is that companies paid far more than peanuts but got monkeys anyway. The financial blow-up demonstrated that many highly rewarded people did not know what they were doing.
He seems to think that this latest public furore over pay is different to the others he has witnessed in the past 23 years and that reform is on the way. I’m not so sure. Many of those I’ve spoken to while researching the topic don’t seem to think anything will change much. Skapinker asks if journalists will still be writing the same pay stories two decades from now. I can’t help feeling that we will.
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