Massive Inequality Fuelled Over the Excessive Pay of Executive 1

Massive Inequality Fuelled Over the Excessive Pay of Executives There’s a tendency these days to consider the huge gap between rich and poor as an inevitable feature of modern society, particularly when the pundits k eep democratizing the phenomenon by claiming that the discrepancy is due to education; the educated receives more than the less educated. Only until Occupy London happened did the whole society in the world pay serious attention to the burning inequality issue. However, this argument about inequality has proved consistently ineffective as our politicians are now in more intimate relationships with extravagantly wealthy executives than ever before. The pay of executives, therefore, keeps rocketing without any regulations to curb it when the majority of people are still suffering from high unemployment rate and the sovereign debt crisis that forces governments to cut public e xpenditure. According to the High Pay Commission 2011 report, pay of executives had soared by more than 4000% in the past 30 years while average worker’s salary had increased merely threefold. Paradoxically, these top executives who are responsible for the financial crisis in 2008 due to their excessively risky practices continue to receive huge a mounts of money. In contrast, during this crisis millions of people became unemployed, homeless, and without savings. At the same time the governments were giving away taxpayer’s money for bailout programs to save the banks, burying countries in mountains named sovereign debt. In addition to these sufferings, people are about to feel the pain of an era of aus terity that will cut investment in education of the youth and curtail pensions of retired people. In the light of justice coming from our politicians, the people who should be punished, top executives and bankers, got away safe and sound from the crisis while the people who are at the bottom of the society, the people with the 10% lowest income, are desperately struggling to endure the consequences. In that light, the gap between the haves and the have-nots is growing drastically and inequality is being fuelled. The question is whether those top executives deserve high pay and incentives as rewards, for some executives argue that companies have to increase the pay to keep talented managers. In other words, the pay structures for those executives are based on the assumption that they need to be paid excessively to do their jobs. Otherwise they will leave for other countries. However, as the High Pay Commission 2011 report indicates, this assumption is untrue because the “global mobility is limited”, thus making it not easy for CEO to switch from UK to other economies. Furthermore, excessive remuneration “damages the

Massive Inequality Fuelled Over the Excessive Pay of Executive 1

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