October 2011 has seen the rise of ‘Occupy’ protests across the world, commencing with ‘Occupy Wall Street’ in New York. It became a significant movement and led to similar protests in Tokyo, Rome and other cities. In New York, it was supported by ‘protest chaplains,’ who were from all different religions and beliefs in sympathy with the aims of the movement.
It was sparked off by the economic crisis, exasperated by the actions of the banks (some of which had to be rescued by national Governments).
In the United Kingdom, the protest against the lack of sustainability and the effects of the mismanagement of capitalism was seen in cities as diverse as Glasgow and Bristol. The main focus was on the group that attempted to occupy the Stock Exchange, but ended up camped outside St Paul’s Cathedral.
The situation was further worsened by news by the findings of a pay research company, Incomes Data Services (IDS), that the pay of the directors in the FTSE 100 companies rose by 43 per cent so that the average payment was just below £2.7 million. This rise (which included salary, benefits and bonus) was higher than the Chief Executive, the person who was actually managing the company. It may be difficult for FTSE 100 companies to justify the significant increase in earnings awarded to their directors.’
Steve Tatton, the report, commented: ‘At a time when employees are experiencing real wage cuts and risk losing their livelihoods, without further explanation
David Cameron, the Prime Minister, stated that the report was ‘concerning’ and called for big companies to be more transparent when they decided executive pay.
Ed Milliband, the Labour leader, remarked that the executive pay increases were part of a ‘something for nothing’ culture, as the stock market had not reflected this increase.
Base salaries for executives had increased by merely 3.2 per cent, which was above the median rise recorded by the same body for average pay settlements of 2.6 per cent for private sector workers. The annual review of pay trends by Xpert HR for 2011 (published in September 2011) also showed a median increase of 2.2 per cent. These figures compare with the October Consumer Price Index inflation figures of 5.2 per cent.
The bonus payments for directors increased, on average, by 23 per cent from £737,000 in 2010 to £906,000 in 2011.
The median settlement for private sector deals in the three months to the end of September 2011 was 2.6 per cent, up from 2.5 per cent in the three months to August 2011. The median in the private sector remained at zero growth. The analysis indicated that the median pay increase for the entire economy was 2.4 per cent, below the inflation rate of 5.2 per cent in September 2011.
John Monks, the Trade Union Congress (TUC) General Secretary, commented: ‘The pay gap between directors and the rest of us is getting wider every day. No one can now claim that these rises bear any relation to performance. It’s time for a serious look at reforming a company law system which permits such shocking and unfair rises.’
Unite, one of the largest trade unions, defined the increases as being ‘obscene’ and has called for shareholders to be given more power to control the directors.
Len McCluskey, the General Secretary of Unite, remarked: ‘The Government should strongly consider giving shareholders greater legal powers to question and curb these excessive remuneration packages.
‘Institutional shareholders need to exercise much greater scrutiny and control of directors’ pay and bonuses.
‘It’s obscene and it shows that the City has learned nothing during the financial troubles of the last four years.’
Mr McCluskey was reported by Personnel Today (‘Executive pay in FTSE 100 companies jumps by 49%,’ 28 October 2011) as saying: ‘This damning report shows just how much these pampered directors are removed from the lives of working people struggling to hold on to their jobs and paying soaring energy, food and transport costs.
‘This is an astonishing display of boardroom greed. It is exactly why people have been occupying St. Paul’s to protest against the behaviour of the City elite and a Government which is turning a blind eye to these abuses.’
The background can be seen in the launch of the consultation on the future of narrative reporting, including a discussion paper on executive remuneration, by Vince Cable (the Secretary of State for Business) in September 2011. He has stated: ‘The general disconnect between pay and long-term performance suggests there is something dysfunctional about the market in executive pay or a failure in corporate governance arrangements.’
There are numerous passages in the Bible about equality in pay so that there would not be such pay discrepancy. An example can be found in James 2: 5 – 7: ‘Listen, my dear brothers. Has not God chosen those who are poor in the eyes of the world to be rich in faith and to inherit the kingdom he promised those who love him? But you have insulted the poor. Is it not the rich who are exploiting you? Are they not the ones who are dragging you to court? Are they not the ones who are slandering the noble name of him to whom you belong?’
It is important to realise how transitory riches are: ‘for riches do not endure forever, and a crown is not secure for all generations’ (Proverbs 23: 5) and ‘WE brought nothing into the world and we can take nothing out of it.’ (1 Timothy 6: 7)
Although riches in themselves are not evil, we are called to more equality in our wealth. In Proverbs 30: 7 – 9: ‘Two things I ask of you, O Lord; do not refuse me before I die. Keep falsehood and lies far from me; give me neither poverty nor riches, but give me only my daily bread. Otherwise, I may have too much and disown you and say, “Who is the Lord?” Or I may become poor and steal, and so dishonour the name of my God.’
Whether we are involved in the protest in the financial districts or are active in seeking equality in our society, we have to be aware (like Thomas Beckett in TS Eliot’s Murder in the Cathedral) that we do not fall down the pit holes of self-righteousness, pride or , in this case, its ugly sister greed.
We are to seek to have God’s mind, by being aware of what the Bible says and walking in the Spirit to ensure that we speak out His truth, untainted by our weaknesses but in His strength.
Sources;
‘Executive pay in FTSE 100 companies jumps by 49%,’ Personnel Today, 28 October 2011
‘Pay deals remain below inflation,’ Workplace Law Network, 28 October 2011
‘Surge in pay for company directors,’ People Management (CIPD), 28 October 2011
‘Top directors’ pay up 49% in the past year,’ Workplace Law Network, 28 October 2011
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