An interesting post from Paul Ormerod on how to curb the excesses of executive pay, following the new Prime Minister’s announcement that she would legislate to do so. CEO pay has risen dramatically in proportion to that of shop floor workers since the 1980s, particularly in the US and UK, and less so in other countries. This trend has little economic justification in many cases and has become a social norm with its own self-sustaining dynamic.
Ormerod suggests a more subtle approach than legislation: withhold the awarding of honours such as knighthoods, or a seat in the House of Lords, to bosses who behave ostentatiously with regards to pay. Who knows, it might work. But something needs to be done as part of a package of policies to promote greater social justice.