Here’s a tedious piece of mischief making from Halliwell Consulting, an outfit that specializes in designing executive compensation schemes.
According to a piece of research from the company, the chief executives of London-quoted media companies are overpaid compared with their peers working in other sectors.
The differential is around 15%. So your typical media-flavoured chief executive in the FTSE-100 earns £832,000. But chief executives working in other sectors typically earn £725,000 a year.
It gets worse (of course). Paul Wolstenholme, a director of Halliwell, points out that media companies have underperformed the broader market. Since 2004, FTSE companies have increased shareholder returns by 65% since 2004. But the media sector has only managed 30%.
Meanwhile, says Wolstenholme, “executives are taking bucketloads of cash out of the businesses”. Among those said to be living the life of Riley include Sly Bailey of Trinity Mirror (who earns £700,000 against a FTSE 350 CEO average of £350,000).
Sorry, but this is yawn-inducing.
For one thing, the cost of hiring Halliwell’s “consultants” would presumably gobble up most of that differential between £832,000 and £725,000.
And is the 15% differential relevant? Most probably it’s a temporary anomaly dating back to pre-2005. As any negotiator knows, wages move slowly in response to market conditions. It certainly won’t be enough to spur the big pension fund managers into action.
In any event, you could argue that a 15% premium it’s a poor return for the thankless job of tarting up media businesses for a disbelieving investors.
Alternatively, look at it this way. Re-distribution of Sly Bailey’s “excess” salary among the employees of Trinity Mirror would result in additional wages of 61p per head per week. After tax at (say) 20%, we’re looking at the cost of a packet of crisps per head.
Fat cat headlines are fun. But they’ve got precious little to do with the bigger problem of low pay for journalists across the media sector. Some serious analysis of that would be useful.