The only issue is whether those asking for big pay packets by pointing at their counterparts in the U.S. are actually of the same quality. In other words, would these people receive comparable job offers at higher salaries in another market? If yes, there is an argument to be made to pay competitive salaries. If these individuals are not of comparable quality, there is little justification to look at U.S. figures. After all, one doesn't pay as much for a Beaujolais as for a Pomerol?
Wednesday, December 2, 2009
CEO Pay: Central Bank Chief is a Realist
The Examiner quotes Patrick Honohan, the Governor of the Central Bank, as favoring a sensible approach to the politically sensitive issue of compensation at financial institutions: "when it comes to certain key individuals with hard-to-find experience, skills and reputation, we have to be realistic price-takers and acknowledge the opportunities these individuals have in a competitive world market which still rewards these attributes very well."
The only issue is whether those asking for big pay packets by pointing at their counterparts in the U.S. are actually of the same quality. In other words, would these people receive comparable job offers at higher salaries in another market? If yes, there is an argument to be made to pay competitive salaries. If these individuals are not of comparable quality, there is little justification to look at U.S. figures. After all, one doesn't pay as much for a Beaujolais as for a Pomerol?
The only issue is whether those asking for big pay packets by pointing at their counterparts in the U.S. are actually of the same quality. In other words, would these people receive comparable job offers at higher salaries in another market? If yes, there is an argument to be made to pay competitive salaries. If these individuals are not of comparable quality, there is little justification to look at U.S. figures. After all, one doesn't pay as much for a Beaujolais as for a Pomerol?
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