Best of the financial columnists

CEO pay: the excuses keep coming

Michael Skapinker

Financial Times

Theresa May's proposals on executive pay have been watered down, but still business leaders complain, says Michael Skapinker. This is unsurprising. I have been writing about CEO pay for 30 years and the excuses keep on coming. According to the "L'Oral defence", CEOs deserve to be paid huge multiples of their workforce's salaries because they deliver proportionally more benefits. But to be properly incentivised, even that's not enough: they require bonuses too. Hence the rise of share options, which have "hugely boosted" CEO pay, but at the expense of incentivising short-term decision-making. Then there's the insistence that execs don't set their own pay, remuneration committees do, that they'd earn far more in the US, and that publishing pay ratios could be misleading as an investment bank CEO with lots of highly paid staff will "look more benevolent" than a factory owner. But the point is, CEOs have been trying to thwart reform "and their pay has been soaring for decades".

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Dirty diesel is poisoning Africa

Lola Okolosie

The Guardian

Five west African countries have announced plans to end the practice of European oil companies and traders exporting "African quality" diesel. But the exploitation of Africa's people continues, says Lola Okolosie. "African quality" diesel has sulphur levels as high as 3,000 parts per million when the European maximum is 10ppm. To be clear, "it is not fit for European humans". For commodities traders Vitol and Trafigura, their defence is simple: "there's nothing illegal" about what they are doing. "Yet in 2013, nearly 20,000 people died from air pollution in Ghana alone. It takes a breathtaking level of moral bankruptcy to happily profit from an enterprise that kills thousands." It's not just the likes of Vitol and Trafigura, and it's not just Africans. Huge corporations are happy to exploit us all, "impoverished immigrant or impoverished northerner" alike. We "exist in solidarity as cannon fodder in a clamour to increase capital". These "Goliaths of global capital" can do better. "The fight is to make them see that."

America needs a better safety net

Jesse Singal

New York Magazine

America likes to see itself as a "singular force of prosperity and opportunity", but by many public health metrics, including preventable deaths, it no longer looks "like a top-tier world power", says Jesse Singal. According to the National Centre for Health Statistics, life expectancy fell from 78.9 in 2014 to 78.8 in 2015, the first drop since 1993. Middle-aged whites, according to Princeton economists Anne Case and Angus Deaton, are the most affected, largely owing to "disturbing upticks" in addiction and suicide. Why is this? It is partly down to the absence of the safety nets that exist in most well-functioning societies. When Americans get a "bad break", there is nothing to break their fall and, all too often, they slide into a "tailspin". Obamacare arrived too late for some, and it doesn't erase the "grim long-term economic reality" for workers. People can only live on the brink for so long, before there are "serious consequences", as "every new set of shocking mortality statistics" shows.

Britain is neglecting its elderly

Editorial

The Times

"The state of social care in Britain is a disgrace," says The Times. A third of residential care homes are at risk of bankruptcy, the social care budget has been shaved by nearly 10% since 2010, and more than 5,000 care beds have been lost in the past 18 months. The number receiving help has fallen by 25% since 2010 and Age UK says that more than a million people who have trouble with basic activities receive no help at all. And by the end of this parliament, there will be a million more people over the age of 75. The government is "evading its responsibility". Sir Andrew Dilnot's 2010 report on social care was "shelved" until 2020 because it was thought his cap on self-funding was too low, but something has to be done, and more money found, urgently. Rules on council tax are expected to be changed. National insurance could also be increased, and more dedicated housing built. "This is a rich country and it should be a good one to grow old in."