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King_Ghidra
21-10-2005, 09:41:47
http://www.guardian.co.uk/executivepay/story/0,1204,1597497,00.html

The retail entrepreneur Philip Green has banked 1.2bn after awarding himself the biggest pay cheque in British corporate history. The huge dividend has come from the Arcadia fashion business, which has 2,000 outlets and spans high street names including Top Shop, Wallis and Burton. It is more than four times the group's pre-tax profits of 253m.
The billionaire revealed a 1.3bn payout yesterday as he unveiled Arcadia's annual results. Mr Green owns 92% of the business and will therefore receive 1.17bn. The balance will go to the banking group HBOS, which bankrolled his purchase of the business for 850m three years ago and owns 8% of the shares.


Some great quotes in this article:

The huge payout is bound to fuel speculation that Mr Green still harbours ambitions to buy Marks & Spencer[...] However, Mr Green said last night that he had no plans for the money.[...] The cash will be coming from a seven and a half year loan to Arcadia. "It is senior debt, not rinky-dinky funny money. It is plain vanilla, not chocolate or raspberry,"

Mr Green said he was not unduly concerned about the two underperforming chains: "We are never going to get everything all right. I am not focused on any one brand. It's great to have a premier brand [Topshop] but all the teams work very hard. It's like having seven children: you have to treat them all the same, you can't have favourites."

The entrepreneur said trading performance since the year-end had declined slightly but he insisted that was down to the recent warm weather: "It was 24 degrees last week. Seasonal product has slowed up because of the unseasonal weather. Even I can't sell ice to eskimos."

Dyl Ulenspiegel
21-10-2005, 09:47:49
Well, as long as the business carries it...

What I find a lot funnier is the Refco bancrupcy, where management cashed in to the tune of 1 billion $ and change just the year before...

LoD
21-10-2005, 10:14:27
BTW, Dyl, how did that scandal with the ministry of finance's (or was the minister's of finance) homepage end?

Gary
21-10-2005, 10:30:36
I can't put my finger on it yet but there is something that feels distinctly wrong with this sort of thing. I can't comprehend that anyone can improve the lot of the world by such an amount, even if they work 24 hours a day 365 days a year, such that they are deserving of such a pay-cheque. No one achieves benefits to society alone, many would ahve been invloved.

May not be easy to find where the sting is, but my gut reaction is that one only gathers that much by skimming off a small amount from a lot of other people. Unsure if that's the staff or the customer, but probably both. It's a strange system that's evolved, and we justify, where some folk work hard caring for others to get a pittance, and yet those with the confidence and ability to "laugh at risk" and talk their way to the big deals are rewarded so. Doesn't seem civilised.

Nills Lagerbaak
21-10-2005, 10:39:23
It isn't. I don't believe in it either.

Colon
21-10-2005, 10:47:35
I don't see what's wrong, it's his company after all.

King_Ghidra
21-10-2005, 10:48:08
It's capitalism for christ's sake, quit crying already

Nills Lagerbaak
21-10-2005, 10:54:44
Capatalism is not the one true God. But let's not get into a retarded argument like this one.

King_Ghidra
21-10-2005, 11:02:25
:lol: err ok

Gary
21-10-2005, 11:14:05
Originally posted by King_Ghidra
It's capitalism for christ's sakeHe's donating the money to the Christian church ? :eek:

Dyl Ulenspiegel
21-10-2005, 11:21:48
Originally posted by Nills Lagerbaak
Capatalism is not the one true God.

HERETIC!

Drekkus
21-10-2005, 11:27:51
Originally posted by Gary
I can't put my finger on it yet but there is something that feels distinctly wrong with this sort of thing. I can't comprehend that anyone can improve the lot of the world by such an amount, even if they work 24 hours a day 365 days a year, such that they are deserving of such a pay-cheque. No one achieves benefits to society alone, many would ahve been invloved.

May not be easy to find where the sting is, but my gut reaction is that one only gathers that much by skimming off a small amount from a lot of other people. Unsure if that's the staff or the customer, but probably both. It's a strange system that's evolved, and we justify, where some folk work hard caring for others to get a pittance, and yet those with the confidence and ability to "laugh at risk" and talk their way to the big deals are rewarded so. Doesn't seem civilised.
Yes, wouldn't it be nice when we would all have the same paycheck, no matter what we do or how hard we work. Sad thing is that isn't how it works. See eastern Europe.

That guy built a corporation, he provides thousands of people with the means to live. If they can get a better deal somewhere else, they will. He provides thousands of customers with products they want/need. If they can get a better deal elsewhere, they will.
Without entrepreneurs like that, our system would break down. People who will take risks, and many of them go bankrupt. But somehow the ones that do make it, and get the reward for their effort, are looked upon as criminals. I just don't get that.

Gary
21-10-2005, 11:33:57
You don't need to enforce the same pay-cheque, that wouldn't be 'nice' at all. Differentials are perfectly acceptable. The problem is a system that allows unethical extremes. Straw men can always be knocked down.

The idea that if someone can provide others with something and that if they don't like it they can leave, is an abhorent guidline, as it allows those that can to do more or less what they like with others with no ethical considerations. A civilised framework would prevent that.

Debaser
21-10-2005, 11:39:04
Why's it unethical?

Nills Lagerbaak
21-10-2005, 11:40:29
It also assumes that those who want to leave, can leave. That's not reality. Arguments for this sort of thing always seem so simplistic to me...

fp
21-10-2005, 11:42:04
It isn't unethical. It's his company and he owns 90% of the shares. Of course he's going to get a gigantic dividend - and after all they have had a pretty good year considering how depressed the high-street retail market is. A major part of the capitalist system revolves around running a business for the benefit of the shareholders and making sure they get rewarded through dividends.

fp
21-10-2005, 11:45:36
Originally posted by Gary
I can't put my finger on it yet but there is something that feels distinctly wrong with this sort of thing. I can't comprehend that anyone can improve the lot of the world by such an amount, even if they work 24 hours a day 365 days a year, such that they are deserving of such a pay-cheque. No one achieves benefits to society alone, many would ahve been invloved.


I don't think he got the dividend payment as some sort of gift for his services to mankind! Where does this stuff about "benefits to society" and "improving the world by such an amount" come from? I don't see what kind of point you're trying to make.

Nills Lagerbaak
21-10-2005, 11:45:36
I don't think Gary's disputing how the capatalist system works, just that when it works to it's extremes there should maybe be some ethical controls applied. I mean no one p[erson needs that sort of money.

Nills Lagerbaak
21-10-2005, 11:46:47
And it all bolis down to which sort of socity you'd rather live in. Me, the latter.

fp
21-10-2005, 11:47:47
Originally posted by Nills Lagerbaak
I mean no one p[erson needs that sort of money.

Of course he doesn't NEED it. You and I don't strictly NEED the money we earn either. I bet if our salaries were cut by a third we'd find a way to survive somehow - and yet I don't see either of us volunteering to reduce our pay. And nor should we.

Are you proposing that people should only receive the money they "need" or "deserve"? If so, who should decide what those amounts are?

Nills Lagerbaak
21-10-2005, 11:54:04
Of course not us (unless you are earn sums like him). I'm sure a very financially sound system can be found for that sort of thing, but it's not my job to work it out, nor is my job as a revolutionary.

Drekkus
21-10-2005, 11:56:22
Originally posted by Gary
You don't need to enforce the same pay-cheque, that wouldn't be 'nice' at all. Differentials are perfectly acceptable. The problem is a system that allows unethical extremes. Straw men can always be knocked down.

The idea that if someone can provide others with something and that if they don't like it they can leave, is an abhorent guidline, as it allows those that can to do more or less what they like with others with no ethical considerations. A civilised framework would prevent that. There is a civilised framework. Unions and the government are there to make sure the employees aren't sucked dry by the employers.

And stating that leaving if you can find a better option is too simplistic, is bollocks. People tend to bitch a lot about work, but somehow avoid seriously looking for another job until things get really out of hand. BGH took matters into his own hands. He got fed up with his old job, looked around and is now making more money with a less anoying boss.

Drekkus
21-10-2005, 11:58:45
Originally posted by Nills Lagerbaak
I don't think Gary's disputing how the capatalist system works, just that when it works to it's extremes there should maybe be some ethical controls applied. I mean no one p[erson needs that sort of money. I really hope your band will make it big one day. Just to see you give all your money away to poor unemployed people, since you don't really need it. :D

Gary
21-10-2005, 12:24:19
I don't think he got the dividend payment as some sort of gift for his services to mankind!

I think, in a very real sense, that is exactly what all wages/salaries/etc. are. Money is, in effect, and IOU from society for services/goods rendered. You cash them in for some service/goods that you want in exchange. If you haven't contributed to society then you are living on the charity of those that do. (Or on a 'bank' of past contribution.)

There is a civilised framework. Unions and the government are there to make sure the employees aren't sucked dry by the employers.

That is a start, where it exists and works, but IMO the fact that someone can pay themselves such vast sums I consider is self evident that there is still a problem. One should start from the premise as to whether one considers such vast difference in fortunes ethical first, and if not try to find out where there's a flaw. If you build up from the other way, each step in your reasoning may seem ok, but you end up then with a result that seems very wrong.

Not sure what you are getting at re looking for another job. An individual moving elsewhere, has no effect on whether is it ok to underpay or overcharge or whatever. Society should strive for a system that's seen to be right, not just one that's workable.

I really hope your band will make it big one day.

:) Humourous, but it shouldn't be up to a few saintly types to go without, while the rest decide there's nothing wrong and grab all the system allows.

Drekkus
21-10-2005, 12:36:54
should strive for a system that's seen to be right, not just one that's workable.
A system that's seen right by who? If I would come up with a brilliant concept, start a business, hire people, pay salaries, social benefits, sick leave, struggle for years to get it right, and finally get there, I want my reward, and I wouldn't want some kind of ethics police telling me I'm not entitled to it. That's what makes the system work, the chance to make it big. If you tell people they can't make more than an x amount (because it isn't ethical), I can assure you people will not make an effort to make more. The loss in wealth and welfare that would cause, is far far greater than having a few people out of millions hit the jackpot. And that's what it is, a jackpot. If you invest in something, chances are you will never see a penny in return. When it does pay off, you can't go around telling them that their lucky break isn't deserved.

fp
21-10-2005, 12:57:24
Originally posted by Gary
I think, in a very real sense, that is exactly what all wages/salaries/etc. are. Money is, in effect, and IOU from society for services/goods rendered. You cash them in for some service/goods that you want in exchange. If you haven't contributed to society then you are living on the charity of those that do. (Or on a 'bank' of past contribution.)

You dirty commie. :D

Colon
21-10-2005, 12:59:31
It's not a pay check, It's a dividend.

Nills Lagerbaak
21-10-2005, 13:13:02
Originally posted by Drekkus
I really hope your band will make it big one day. Just to see you give all your money away to poor unemployed people, since you don't really need it. :D

Ha ha. I wouldn't mind in the slightest if my riches came with some kind of proviso.

As I said before it all depends what kind of society you want to live in.

Debaser
21-10-2005, 13:32:45
Am I right in presuming that he'll be taxed over 600,000,000 of that? That's a pretty hefty contribution to society.

Gary
21-10-2005, 13:53:33
A system that's seen right by who?

By folk generally of course. We all have the right to argue such issues.

If I would come up with a brilliant concept, ... I want my reward

And you should have one, commiserate with the effort you put in, not commiserate with any excess amount your company managed to garner.

I wouldn't want some kind of ethics police telling me I'm not entitled to it.

To show an extreme comparison to make the point. I'm sure a murderer doesn't want the police to tell them they can't murder someone either. The thing is that society sets guidelines so that folk act in a correct manner towards one another. These should be democratically set (but aren't) and should cover moral ethical issues alone, unless you can think of good reasons to legislate elsewhere (but they don't).

That's what makes the system work, the chance to make it big.

You can make it big without making it obscene. After a certain point, if you still want more money, then it is pure greed, or else you are one of those for whom the financial gains are no longer a driver.

The loss in wealth and welfare that would cause, is far far greater than having a few people out of millions hit the jackpot.

What ? Zero loss you mean ?

When it does pay off, you can't go around telling them that their lucky break isn't deserved.

It's not just a lucky break though is it ! Reasonable gains giving you a reasonable award is one thing. This is quite another.


It's not a pay check, It's a dividend.

No real difference. A dividend takes wealth out of the company, to pay a cheque to the owners. He effectively paid himself whatever the method.

Debaser
21-10-2005, 13:56:45
Originally posted by Gary
I wouldn't want some kind of ethics police telling me I'm not entitled to it.

To show an extreme comparison to make the point. I'm sure a murderer doesn't want the police to tell them they can't murder someone either. The thing is that society sets guidelines so that folk act in a correct manner towards one another. These should be democratically set (but aren't) and should cover moral ethical issues alone, unless you can think of good reasons to legislate elsewhere (but they don't).

This is probably the most retarded arguement I've ever heard. What's it got to do with anything?

Gary
21-10-2005, 13:57:58
Apart from the ability to be insulting, what are you missing from it ? Seems plain enough to me.

fp
21-10-2005, 13:58:44
Originally posted by Debaser
Am I right in presuming that he'll be taxed over 600,000,000 of that? That's a pretty hefty contribution to society.

A bit less than that, I think. IIRC UK dividend tax for a higher rate tax-payer is 32%. It's a sizable bill no matter which way you slice it though!

fp
21-10-2005, 14:00:24
Originally posted by Gary
Apart from the ability to be insultive, what are you missing from it ? Seems plain enough to me.

You equated being a successful businessman to being a murderer. The two are hardly comparable.

Nills Lagerbaak
21-10-2005, 14:09:57
And someone equated what was in affect an extension of taxation laws as and assault by the ethics police.

Gary
21-10-2005, 14:16:24
What I did was to compare the desire of a business man not to be told what to do, with the desire of a murder not to be told what to do. To illustrate the point that what the business man wanted wasn't relevant. I stated it was an extreme example to make the point obvious.

Drekkus
21-10-2005, 14:17:15
Gary, why should YOUR worldview and set of moral codes be applied to the rest of the world. If an investor loses all his money on a risky plan, can he get a reasonable amount of his money back? Who are you to decide what is reasonable and what is not? Is 5% gain a year from investments reasonable, 20, or 50? Because otherwise investors can just put their money in the bank, and get a nice interest. That way you don't have to worry about employers who bitch about their work.

If my brilliant concept would allow me to gain a euro for every product sold, and the whole world would go out and buy my stuff, I want that billions of euros of profit. What I then do with it, give it to charity or go bathe in it, is my business. You just have to accept that some people make it big, and some don't. And no one knows up front who will.

Colon
21-10-2005, 14:21:38
No real difference. A dividend takes wealth out of the company, to pay a cheque to the owners. He effectively paid himself whatever the method.

A dividend is like the interest you're getting on savings. It's a return on capital he's invested into the company. Once again, he OWNS the company, who are you to tell he can't take whatever he wants out of something he owns?

Drekkus
21-10-2005, 14:22:04
Originally posted by Nills Lagerbaak
And someone equated what was in affect an extension of taxation laws as and assault by the ethics police. Gary's plea was for an exention of taxation law??? I saw it as an moral crusade against people who make a lot of money from their own business.

Nills Lagerbaak
21-10-2005, 14:27:10
Well, I agree with Gary; something needs to be done about single people making these rediculous sums of money in one fell swoop. However I believe it would have to be done in a financial way to avoid alegations of moral crusadery.

Drekkus
21-10-2005, 14:33:46
I agree only when it's managers of privatised or publicly owned companies, who give themselves big rewards, even for underachieving. Those fatcats should be dealt with, they're not entrepreneurs who take risks to build their own company.

But someone who owns his own company, he's entitled to earn whatever he wants to, and do with it what he wants (after paying his taxes).

Gary
21-10-2005, 14:34:25
Gary, why should YOUR worldview and set of moral codes be applied to the rest of the world.

Why not ? Are you saying that I have no right to express what I think is correct ? That I have no ability to be right ? That I should just stay silent regardless ?

If an investor loses all his money on a risky plan, can he get a reasonable amount of his money back?

If someone starts up a business and loses it all, he or she will probably start up another. Many, in fact I am told most successful entrepreneurs, have a number of failures behind them before they get a success.

But I'm unsure why you believe my arguments lead to a need to balance the equation by giving people money back. (Although there are enough cases where that occurs anyway. It's a miracle the Rail Track investers didn't win the day yesterday. Their case was weak enough.)

People who fail still get the support of the state to live. And banks have to know when to write off a loss they have no chance of getting back. And it's in their interest to support someone who owes them money.

Who are you to decide what is reasonable and what is not?

Who am I not to ? See first reply this post.

Is 5% gain a year from investments reasonable, 20, or 50?

I'm not playing that game. You know as well as I that, wherever there is a line to be drawn to separate that which is patently ok from that which is not, then there is going to be disagreements as to where it should be. It's not for me to come up with the whole solution just because I point out the flaw.

When does a domestic quarrel become an assault ? When does youthful exuberance become vandalism ? When does the abortion of human cells become pre-birth infanticide ? etc. etc. etc.. These things need to be discussed but it's a cop out to say drawing a line is too difficult because wherever you draw it there are arguments against it, so we'll claim everything is ok.


Because otherwise investors can just put their money in the bank, and get a nice interest.

And no sense of satisfaction. No that's not the stuff entrepreneurs are made of.

You just have to accept that some people make it big, and some don't. And no one knows up front who will.

I don't believe I have to shut up and accept anything. If folk don't have the courage to point out injustice, then nothing ever improves. Maybe the unions should shut up also and let the employers do as they wish ?

Drekkus
21-10-2005, 14:51:49
Originally posted by Gary
Gary, why should YOUR worldview and set of moral codes be applied to the rest of the world.

Why not ? Are you saying that I have no right to express what I think is correct ? That I have no ability to be right ? That I should just stay silent regardless ?
Because you only talk in absolutes. You never say that something is your opinion, you say: that's how it is. You point out THE flaw? What flaw? To you it's a flaw, to me it's fair. I was just trying to understand your point of view, but apparantly not even you are willing to give it any serious thought. All you do is say that it's ethically wrong, then put your fingers in your ears and keep repeating what you said.

You have some sort of idea that all entrepreneurs are succesful and rich by default. They're not. The majority of them fail, and some live the rest of their lives with debts. Just for taking a risk to built a company. You only see the succesful ones, and figure that it's not fair that ALL businessmen make a lot of money.

Gary
21-10-2005, 15:29:02
Because you only talk in absolutes. You never say that something is your opinion,

That's untrue. I often put TLAs such as IMO in my posts, and where I omit to, where we are discussing something, surely it is clear it is my opinion and not someone else's that I am putting forward.

to me it's fair

Then please feel free to discuss why it is fair that someone who puts in a lot of labour looking after others and being paid a pittance while someone who succeeds in putting together a deal or so pays themselves an unimaginable (to many folks) amount of money. I take it as self evident that, that is wrong in principle, and no amount of concentrating on the steps that lead one to that circumstance is going to change the end result and make it fair.

All you do is say that it's ethically wrong, then put your fingers in your ears and keep repeating what you said.

On the contrary I say the end result is ethically wrong, you are entitled to disagree if you wish. I have no need to put any fingers in any ears since no one has shown any reason why such inequality isn't wrong. It's a basic tenet that all should be treated fairly, and such a difference between people shatters that. And in addition the way one gathers such wealth has to be suspect since it is clear that to gather that amount folk must be being charged what they will pay, and not what it costs plus a reasonable profit margin. The whole thing is questionable on both counts.

apparantly not even you are willing to give it any serious thought

?!?!? No serious thought ? Why ? Because I don't agree with you ?

You have some sort of idea that all entrepreneurs are succesful and rich by default. They're not.

How do you come to that conclusion ? I say that folk who pay themselves this sort of wealth can not have done enough to justify it. They do it because they can. Rich by default doesn't come into it.

You only see the succesful ones, and figure that it's not fair that ALL businessmen make a lot of money.

Not so, but those who haven't been successful yet are those that are still trying. Or have given up. But really that makes no point, for it fails to argue either way regarding whether excessive payments are right or not. A million failures doesn't change whether something is right or wrong, should you succeed.

Dyl Ulenspiegel
21-10-2005, 15:38:50
This forum can't handle a serious drekkus. STOP IT!!!

Drekkus
21-10-2005, 15:40:23
Ah well, Gary, the weekend has started. Maybe we should bump this thread later when I'm at work again and don't feel like working.

Drekkus
21-10-2005, 15:40:44
:lol:

good crosspost Dyl.

Dyl Ulenspiegel
21-10-2005, 15:40:47
thanx

Dyl Ulenspiegel
21-10-2005, 15:41:10
that was another xpost

Gary
21-10-2005, 15:49:34
To be honest I'd think I'd rather leave it. Gets tedious after a while. I've made my point, I don't seem to have convinced anyone - but that's the norm.

Have a good weekend, and don't bump into too many furreners.

The Norks
22-10-2005, 13:00:11
Danes have a system whereby hefty taxes of about 50% are applied to keep public services in pretty fantastic order, and there is little gap between wages, so barmaids don't earn that much less than directors (in comparison with countries like the UK). This means (in generalities) there's little homelessness, little deference to 'superiors' and you don't have to wait two hours on a freezing platform for your train. Its meant to be the most communist non communist country. BUT its tiny and homogenous so its probably easier to sustain such a system there.