Water under the bridge?

[DrFfybes]

According the the BBC https://www.bbc.co.uk/news/articles/c0dem8v7epzo Liv Garfield, the chief Exec of Severn Trant, was renumerated £3.2M last year despite pollution inceidents rising by over a third from the previous year.

Now some people think this is an outrageous amount, however I beg to differ.

I think she should be paid £5m. However we should deduct minimum wage for each hour the company discharges sewage throughout the year, which in 2023 amounted to nearly 450,000 hours.

Which basically means that if she doesn't pull her socks up she gets bugger all, which I'm pretty sure most people wouldn't object to.

Thoughts on penalty related performance pay packages welcome

Paul

[Gerry557]

Well there is basic pay and bonuses.

Hopefully the bonuses are a result of good performance and not some simple metric like having two sentences in the annual report.

I sure there are some customer's who would like them to have a couple of sentences but they might have to wait as the prisons are full

[UncleEbenezer]

If the water is under the bridge, you pass that very water when you cross the bridge.

Food (or drink?) for thought!

[Lootman]

If the water is under the bridge, you pass that very water when you cross the bridge.

Food (or drink?) for thought!

Or if, as Heraclitus claimed, "you cannot step into the same river twice", then those allegedly polluted rivers were a different river, and the CEO is a different man:

No man ever steps in the same river twice, for it's not the same river and he's not the same man.

[tp33]

Seems to me that bridging the gap between exec compensation and reality could be achieved through performance-related pay that reflects actual outcomes, good or bad, as suggested above. This could reasonably apply to fund managers and IFA’s too. I would be much happier to share out-performance if losses were shared as well, to focus minds. You would hope that senior people with confidence in their own expertise would be willing to sign up to such a scheme - perhaps they are not quite as clever as they keep telling us!

To

[DrFfybes]

Seems to me that bridging the gap between exec compensation and reality could be achieved through performance-related pay that reflects actual outcomes, good or bad, as suggested above. This could reasonably apply to fund managers and IFA’s too. I would be much happier to share out-performance if losses were shared as well, to focus minds. You would hope that senior people with confidence in their own expertise would be willing to sign up to such a scheme - perhaps they are not quite as clever as they keep telling us!

To

They only need to be just clever enough to convince the millions of people who invest through them.

Paul

[Lootman]

Seems to me that bridging the gap between exec compensation and reality could be achieved through performance-related pay that reflects actual outcomes, good or bad, as suggested above. This could reasonably apply to fund managers and IFA’s too. I would be much happier to share out-performance if losses were shared as well, to focus minds. You would hope that senior people with confidence in their own expertise would be willing to sign up to such a scheme - perhaps they are not quite as clever as they keep telling us!

That is not how it works though. If I am in the running for a CEO job then I expect a 7-figure salary. Otherwise I am not taking the job.

So yes, my total comp depends on performance as much of it is bonus or stock options. But there are always things I cannot control that can lead to bad outcomes. That means lower bonuses and stock options, but why would I risk losing my salary simply because of events?

Same for fund managers. We know that at least 50% are doomed to under-perform. But that doesn't mean you can pay that half peanuts. You pay a 7-figure salary for the possibility of success; not for the guarantee of it.

[Redmires]

This was on Radio 4 last week

The Briefing Room. David Aaronovitch and guests explore the troubled state of the water industry in the UK. How do companies solve the sewage problem, fix the leaks and reduce the debt mountain?

https://www.bbc.co.uk/sounds/play/m001yxl5

It concentrates mainly on Thames Water but the whole industry comes under scrutiny, and doesn't come out of it well. Very bad management is a key factor along with a regulator who acts in the interests of the water companies. I've recently sold my long held SVT shares, thinking that once Thames goes, they will all follow. It's not worth the risk. And anything could happen under a new government, and I hope it does.

[Nimrod103]

This was on Radio 4 last week

The Briefing Room. David Aaronovitch and guests explore the troubled state of the water industry in the UK. How do companies solve the sewage problem, fix the leaks and reduce the debt mountain?

The problem is that other things beyond the water companies control are happening. Last year they finally properly fixed a broken sewer out in the road which was causing sewerage to spill into my garden - OK that's the water company problem. A new large deep hole has now appeared further down the road. If a car went into it (and they may have done for all I know) it could have caused a serious accident. This looks much more like a road breaking up under the strain of more traffic, heavier traffic and lorries. The pipes exposed don't look damaged thankfully.

[DrFfybes]

That is not how it works though. If I am in the running for a CEO job then I expect a 7-figure salary. Otherwise I am not taking the job.

So yes, my total comp depends on performance as much of it is bonus or stock options. But there are always things I cannot control that can lead to bad outcomes. That means lower bonuses and stock options, but why would I risk losing my salary simply because of events?

Same for fund managers. We know that at least 50% are doomed to under-perform. But that doesn't mean you can pay that half peanuts. You pay a 7-figure salary for the possibility of success; not for the guarantee of it.

I assume the same philosophy isn't applied when recruiting surgeons

[Howard]

I guess that highly paid executives like the water company bosses are paying 45% income tax on most of their income and bonuses?

So a lot of the headline income goes back to the government. Ironically it's funded by shareholders.

Working for a large public company means that CEO earnings will be carefully scrutinised by HMRC. Even Tory chancellors can't escape.

https://www.bbc.co.uk/news/business-68999222

regards

Howard