Edited by Adrian Wilkinson, Keith Townsend and Gabriele Suder
Chapter 3: Perspectives on problems in managing managers’ remuneration
At face value a rather narrow field of study, managerial remuneration none the less attracts wide public attention (Sahakiants et al., 2015). Controversy has attached to this otherwise mundane topic, due in particular to the alleged effects of ‘toxic bonus cultures’ encouraging excessive risk taking associated with the recent financial crisis in Europe and the USA. During this time the social contract has come under strain in the Western economies with the opening up of a significant gap between the so-called 1 per cent of individuals enjoying capital-gains-related wealth growth and others. Among the most vocal of these are the ‘squeezed middle’ – employees whose security and relative earnings have suffered in the wake of economic deregulation and ‘globalisation’. At the same time, the relative share of economic gains accruing to labour has receded as returns accruing to capital (including those employed to manage corporations granted capital-based rewards) has markedly increased. The Chair of the UK High Pay Commission puts it bluntly: The public is rapidly running out of patience with a system that allows those at the top to enrich themselves while everyone else struggles to make ends meet. This has been thrown into stark relief by the economic crisis, but has been building for the past 30 years. (Hargreaves, 2012, p. 7)
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