On Sunday, the Financial Times released a list of the highest-paid pension fund CEOs. [The list can be found here.]
The compensation numbers drew criticism from some corners, who said CEOs were getting paid too much at a time when workers are being told to “tighten their belts”. Observers told the Financial Times:
Chris Roberts, director of social and economic policy at the Canadian Labour Congress, described the figures as “alarming”. “These are plans in which trustees have a fiduciary obligation to the plan members. They should be in a similar [financial] relationship to plan members,” he said.
Mr Roberts added that he was particularly concerned with respect to public sector funds. “I am not convinced that these salary levels are warranted when public sector budgets are being squeezed and public sector workers are being told to tighten their belts,” he said.
Deborah Hargreaves, founding director of the High Pay Centre, a think-tank, said: “These figures highlight why we cannot rely on pension funds to hold companies to account on pay. These pension chief executives are benefiting from the high-pay culture themselves and often see nothing wrong with multimillion-dollar awards for top bosses. Scheme members often have a different outlook, but do not have a chance to have their say.”
Ms Egan [national pension official at the University and College Union for academics and researchers] said: “[USS members] are aware that [pension executives] get high bonuses because they meet their benchmarks, and yet the funds are doing poorly and members’ benefits are being cut.
“It is problematic and our members find it very difficult. There is a mismatch between the financial world and members who work in the academic world.”
The argument for high pay has always been that it’s necessary to recruit and retain top-flight talent.
Ron Mock of the Ontario Teachers’ Pension Plan justified high executive pay in an interview with the Financial Times last year:
“[To get] upper-quartile performance, you need upper-quartile people,” said Mock.
Photo by c_ambler via Flickr CC License