Jasmine Birtles: give obeisance to the titans of business

7 June 2019

Hush, bow down, obey and give obeisance. There are gods walking among us and we did not know! Yes, gods of business – titans whose merest touch can build or destroy whole economic worlds – these beings are living with us and we have been blind to them.

I speak of those higher creatures, those shining residents of Mount Olympus who, for the benefit of mankind (plus a go in the company Learjet), deign to work as chief executives of mundane corporations among us mortals.

Yay verily, I speak (in hushed tones) of colossi such as Iain Conn, CEO of Centrica (owner of British Gas). The most holy and revered Conn received a total remuneration of £2.42 million last year – while Centrica’s shares fell to a 20-year low as it reduced its profits forecast and cut jobs for lesser employees. By the end of 2019 it will have shed almost 10,000 employees over four years. Not for Mr Conn, of course (currently papering his guest loo with £5 notes). His pay is 72 times that of a typical employee in the lower quartile of Centrica’s salary range. All hail the God of Gas!

Bow in awe, too, to AstraZeneca CEO, the divine Pascal  Soriot, who garnered £11.36 million in total pay last year, a 9% jump from 2017. Soriot (currently trying to book Taylor Swift to come and sing his children to sleep) made 160 times the average AZ employee’s salary.

Then there’s demigod and former CEO of housebuilder Persimmon, Jeff Fairburn (now playing Monopoly, using real buildings, with Jeff Bezos). He had an £85 million pay package over two years plus stratospheric bonuses before leaving his position because of all the money he was paid.

Ah, and I spy a couple of lesser gods, wafting through the food halls at Harrods, wondering where to spend their bounty. Debbie White, chief executive of government contractor Interserve, and Mark Whiteling, its finance director, were both awarded bonuses last month that accounted for more than half their final salary just before the group collapsed. The two denizens of the C-suite (think job titles CEO, CFO, CIO, COO, etc) earned a combined £1.99 million in the year to March while earth-dwelling shareholders were wiped out.

Yes, there are more of these great ones living among us. In 2018 the typical UK CEO earned the average worker’s annual salary in under three days, according to the High Pay Centre. In the past decade, CEOs’ earnings in the FTSE 100 have increased by four times the national average earnings.

The Zeus of them all is Disney’s Bob Iger, on £50.5 million a year

In Europe, there have been heavenly sightings too. Tidjane Thiam, CEO of Credit Suisse, received a 30% pay rise in 2018, pocketing a total of 12.7 million Swiss francs (£9.64 million). This divinity (agonising over whether to have gold or platinum bath taps in his holiday mansion) was given the sort of remuneration one would expect for someone of his super-human abilities, once the bank returned to profit after a three-year loss-making streak (a mere nothing).

But all these divine beings are still on the planetary level of executive pay compared to America where a CEO’s average salary is $11 million (£8.53 million) per annum. Americans clearly have a special pipeline to the nectar that bestows divinity on the chosen few.

One baby-faced CEO, Patrick Smith, of Axon (the stun-gun and body-camera company formerly known as Taser), languishes on a microscopic salary of $70,000. He is sitting on a more celestial package of $246 million over the next 10 years if he meets certain targets, however. Smith will have to do some actual work to get his payout, including overseeing a tripling of the company’s value. Do they not know who he is?!

But on Mount Olympus, the Zeus of them all is Disney’s chief executive, Bob Iger. He’s paid a starry $65.6 million (£50.5 million) a year – 1,424 times more than the average pay for a Disney employee. He had his 2018 pay deal increased by 80% from $36.3 million in 2017. Abigail Disney, whose grandfather, Roy, was co-founder of Disney with his brother, Walt, said: “I figured that he [Bob] could have given personally... a 15% raise to everyone who worked at Disneyland, and still walked away with $10 million.” But why would he? Have some respect!

Some religious sceptics, such as MP Rachel Reeves, insist these gods’ pay packets are too mythical to be good for the economy. Other god-deniers say their remuneration should be closer to that of lesser mortals doing the work. Sacrilege!

But you and I are happy to continue our votive offerings to these deities in their temples. Who needs decent salaries when you can bow down to their shining wonder and astronomical remuneration packages? Not us!

Jasmine Birtles is a financial journalist and founder of MoneyMagpie.com.
Email her at columnists@moneywise.co.uk.