Philip Green is Not the Only Unacceptable Face of Capitalism

The current system encourages the wrong things (high share prices over long-term success being the obvious). It is very likely to be one of the problems behind our non-existent productivity growth (chief executives limit investment to keep profits high and borrow to buy back shares rather than create new value). And because it very publicly pays some people tens of millions for running companies they have no entrepreneurial stake in, it is horrible for social cohesion.If we really want to see corporate governance reformed — and pay in particular — we need real shareholders (not just middlemen) to be voting and we need those votes to count. Get that sorted and I think we might soon end up with a genuine “radical simplification” of executive pay — in the form of high (but not nuts) flat salaries, some of which we might encourage leaders to buy shares with. I want that. You want that. Surely everyone wants that?

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