Jude Collins

Wednesday, 5 December 2012

Invest NI CEO's pay-hike? FFS!

I’m sitting here listening to a debate the Nolan programme and it’s about the hefty pay-hike the CEO of Invest NI is getting. It’s around £30,000.  Jim Allister is arguing that this is too much, a brace of economic big-shots are arguing that it’s a hike well-deserved.

FFS!  Let’s try some facts about CEO pay, on this side of the Atlantic and the other side.

  1. The argument that if you don’t pay CEOs chunky money they’ll leave is bogus. The University of Delaware has produced a study which shows that CEOs don’t move very often but when they do, they’re flops.
  2. The bigger the gap between CEO pay and average worker pay, the lower the company’s morale, productivity and turnover. Studies by among others Northeastern University Business School and Bentley University show productivity decreasing as the CEO-average worker’s pay gap increases.
  3. Is there any measure of parity between the top and the bottom? The University of California shows that in 2010 the top 1 per cent captured 93 per cent of the growth in income. 
  4. But hasn’t it always been like this? Yes, but not nearly as glaringly. In 1998, the average CEO earned 47 times that of the average worker. By 2010 the figure was 120 times.
  5. Some years ago, Sir Martin Sorrell, the WPP advertising boss, made an ass of himself when he claimed that, given the job, his £1 milliona year basic pay was “very low”. His total package was actually £4.2 million. 
  6. While the good times lasted, the former bosses of Cable & Wireless and Thomas Cook took more than £15 million each from their companies. Then the shares crashed and Thomas Cook almost went bust. Neither man is handing any money back. 
  7. ‘Performance-related pay’ is a sham.  What it means is that the CEO avoids paying taxes on the money.  Last year this cost the US tax-payer $9.7 billion.  With the same money, salaries could have been provided for over 140,000 elementary school teachers or healthcare for nearly 5 million low-income children.
  8. In 1998 Britain, the average CEO earned 47 times the average worker. By 2010 the figure was 120 times. And if you think that’s bad, in 1980  the US's top CEOs got 42 times as much as the average worker. Today the figure is well over 300 times that of the average worker.

Tell you a secret? I don’t blame the CEOs for taking home truckloads of money. The system allows it. Why ain’t the system fixed, then? Because politicians (cf David Cameron’s cabinet) are part of the system as it is and benefit by it. 


  1. I too listened with interest this morning as I did when Mark Ennis and Alastair Hamilton jointly presented to the Stormont Commitee earlier this year and was amzed at the "spin" that was presented and more importantly lapped up by the Committee in Stormont.

    The focus shoud not be on the pay of Alastiar Hamilton but on the performance of Invest NI and these so-called targets that Alastair Hamilton hit to merit the past bonus and this pay hike.

    The big one is jobs - and Invest NI's creativity knows no bounds when it comes to reporting but is woefully limited when it comes to ideas on how to help companies and the development of a strategy for NI PLC.

    Ask them to answer the questions - 'how many jobs, bums on seats, tax paying workers have they help contribute to the economy in the past 4 years since Mr Hamilton took over?'. They cannot answer that direct question but instead will have a "definition" that has to be explained first and then tagging an actual number to that definition will be impossible.

    Then ask 'how many miles has Mr Hamilton flown in the past 4 years, how many countries has he visited, how many events has he spoke at' - that may seem like a good thng, getting out there and promoting NI - BUT, my suggestion is that it first and foremost a promotion of Mr Alastair Hamilton. What has been achieved from those trips?


  2. FROM ABOVE ...

    Then ask, why a very senior job of Executive Director, International Business was left vacant for so long? Surely, it is a crucial role later filled by Barry NcBride.

    Then ask, what are the overseas/FDI teams doing? The big argument at the minute is to cut corporation tax because how can Invest NI compete with a land border rival when their tax rate is 12.5%? The recent furore over Google, Starbucks et al payomg vitually 0% tax, make a mockery of that argument. And in case you missed it Google earlier this year made their first outside of USA research facility investment (as opposed to sales, marketing etc in Dublin) and where did it take place - LONDON, which as far as I know has the same corporation tax rate as NI!

    Why have Dublin been so successful in attrcting Google, Intel, Microsoft, Twitter etc - it comes down to a strategy and key individuals who implemented that strategy and the relationships they built with those companies. Ask Mr Hamilton who his (or his FDI team's) main contact is withing Google, Microsoft et al, when they last met them, what the INI offer/proposition would be to them and what are they actively doing every day to attract those companies to NI?

    Then ask Mr Hamilton what the moral amongst his staff is like - ask him if he would share the results from the staff survey? How many bothered to fill it in, what they said and what he feels the general mood is like within INI.

    Ask him how his "Transform" programme has improved things within Invest NI - I have been told that it has left companies with no client executive (account manager), companies with seemingly ever changing client executives who for every new person they see it is like they are meeting INI for the first time, the new person has no knowledge of the company, its market, what they do, the financial position of the company and their future plans of the company - how can that be a positive thing worthy of a bonus?

    The unfair eye would look at Mr Hamilton and ask the question - 'what in his career history would lead you to believe he has the knowledge and expertise to lead the main economic development agency in NI' - he worked in one company, BT, since 1982. Are BT shining examples of SME / FDI business growth and customer service? Where is the economic development experience? I would imagine his close connections to the Paisley family, his year as a special advisor Mr Paisley and his close ties to the DUP might have been in his corner during the interview process and bearing in mind INI's first CEO who was Leslie Morrison (a highly likeable but no doubt getting ready for retirement gentleman - who again came with no SME, economic development experience) - you got to ask the question, how seriously do Stormont take the CEO role of INI?

  3. It appears that the above comments come from someone with an inside knowledge of Invest N I.The implication seems to be that the D U P will not ask the hard questions.Step forward then the other controlling party in the Executive ,Sinn Fein.Is there any evidence that they have asked the searching questions of Invest N I?Perhaps things are too cosy with their buddies in the D U P for them to break ranks!

  4. You may also want to ask why InvestNI has never actually budgeted AH's (and other senior exec's) bonuses?

  5. Have you ever considered publishing an e-book or guest authoring on other sites?
    I have a blog based on the same subjects you discuss and would really like to have you
    share some stories/information. I know my viewers would
    enjoy your work. If you're even remotely interested, feel free to shoot me an email.

    My blog; cellulite treatment

  6. This is not what people should be focusing on. We should focus on the actions of InvestNI. One particular example is the controlling employee wage levels among companies that they provide assistance to - part of the terms and conditions when INI companies recruit. There is a huge disparity between Northern Ireland wages levels and the rest of the UK/Europe. Wage levels should driven primarily by ROI, target marketplace, experience and skill level. Not by the average advertised wage levels, or what your currently salary is. If Northern Ireland is to grow, investment in employees is the key. InvestNI should not interfere in employee wage level by via InvestNI executives. It drains intellectual capital from NI (emigration), drains taxes to help fund roads, communities and health programmes. We want skilled people to move/stay Northern Ireland, not international companies looking to cut corners and taxes. Completing on wages levels doesn't work. There always we another country that can under us. Northern Ireland should aim be the Silicon Valley of Europe, not the India of Europe.