Tag Archives: executive pay

Guy’s newsletter: the restraint of greed

A few of you have warned me over the years that while you like the veg, you can do without my “commie rants”. I try to confine my weekly musings to the farm but trying to run a business responsibly is itself a political act, so here’s another.

When, five years ago, I realised the business had grown beyond my management skills, I was fortunate to find my managing director Rob Haward; a man who shares my beliefs. Along with setting up a staff profit-share scheme, Rob and I agreed that no-one in the company, including us, would ever earn more than nine times the lowest wage. This may not seem radical but it was as far as we could go without making recruitment and retention of senior and specialist staff impossible; a typical ratio for a UK company of our size is between 15 and 25:1.

Since the recession began and despite Cameron’s cries of “we are in it together”, the rich-poor pay gap has spiralled out of control; executive pay was 60 times the national average salary in the 1990s, but 180 times that today. Indeed in the USA, since the recession the top 1% have taken a staggering 93% of income growth, and the picture is similar here. Not even the most rabid freemarket advocate could argue that is fair. I found myself musing on all this as a result of listening to Robert Peston’s excellent BBC Radio 4 series The Price of Inequality, but my blood reached boiling point last week with news that HSBC appears to have colluded in tax evasion by the super-rich. Worst of all was the extraordinarily complacent response of Cameron, HMRC and HSBC. Have we really sunk into such collective lethargy where we accept such moral bankruptcy as inevitable? Yet, as Robert Peston asserted to an incredulous billionaire; there are powerful rewards other than money. Given half a chance most of us want to do a good job and contribute to something worthwhile, but those potentially very strong motivations are eroded in the face of greed of the rich and powerful.

Despite all of this and to my immense pride (and my MD’s credit) there is a feeling at Riverford that we really are in it together, and we have never had better or more motivated staff, despite being increasingly out of step with executive pay. The restraint of greed can only start at the top.

Guy Watson