THE BLOG

It's All No Change at the Top

29/04/2013 14:22 BST | Updated 29/06/2013 10:12 BST

It is a year since the momentous Shareholder Spring of, er, spring last year and haven't things changed? No. They haven't.

The events of all those months ago (twelve) were precipitated by the justified outrage of "ordinary hard working people" (copyright D. Cameron) to the vast amounts of unearned money with which the nation's top business people were showering themselves.

Remuneration committees are stuffed with the exact same people that benefit form the largesse of remuneration committees. The committee members ruling on the rewards to be doled out to one fat feline, will themselves be sitting up on their hind legs and mewling for the same treatment from the committee ruling on their own remuneration. It is in their interests to keep the wage and benefits package of the top nobs expanding like their waistlines because it will set an example that they will cite when writing the terms and conditions into their own contracts. It is the Monopoly version of you scratch my back and I'll scratch yours - except those aren't plastic houses they are playing for and that's real money.

The Shareholder Spring of 2012 was supposed to address all that. It was not so much an address, however, it was more like a barely audible murmur from the back of the AGM, a mild rumpus from the cheap seats which was given all the respect that small shareholders in gigantic corporations are normally accorded: none.

A few of the management glitterati were moved aside. They will have to suffer the indignity of spending the rest of their days earning the same amount doing an equally average job for other companies, or as consultants and advisers, doing not much for similar amounts. In the worst case scenario, they might even have to retire at a very young age and eke out their time trying to remember all the accounts in which they have stashed all their money. The companies they ran will just have to get by without the expert guidance that led to their shareholders having a cow in the first place.

The truth is that shareholders would not mind their chief executives paying themselves in cheques the size of a bath towels if the company was paying the shareholders well. If the people who actually own the company were getting their due then what would they care if those running it were sleeping on solid gold mattresses and wiping their bottoms with fivers? It is because the poor dopes who bought into the companies were not getting their dues for their investment that they became so angry. They realised that the reason their stock was not working for them was because the men (mostly men) who were steering the ship were pointing the vessel at the rocks and congratulating themselves on a job well done because they hadn't sunk YET.

The shareholder revolt should have led to a sea change in the way pay is doled out at the top. The drugs company Astra - Zeneca, for instance, lost its chief exec in the shareholder uprising. His replacement will have to just put up with receiving only £6.5m in his first three months. I am not making that up.

Golden "hellos" they call them. They sound like what's on the menu at an illegal lap dancing club but are twice the fun, last a lot longer and don't make you sticky. Golden "hellos" are followed by platinum "how are yous" and diamond encrusted "goodbyes". When such insanity is questioned by outsiders the reaction is one of incomprehension. Those who appear to win the lottery every month are surrounded by people just like them. It is normal where they live and that class of people will fight with everything at their disposal (a lot) to make sure that it remains that way.

The real problem with any shareholder uprising against the undeserved meteoric rise in boardroom pay is that most shareholders couldn't care less what the people at the top pay themselves. Big institutional investors don't want to drive down executive rewards because they are also executives who want to get rewarded. If pay goes down for one, a precedence is set and it just may go down for all. No wonder nothing has happened. Hedge funders aren't bothered either because in all likelihood they won't own the shares for long enough for management pay to make a difference. What do you care if the head of a company commutes to work on a flying carpet made of angels wings if you will only own the shares in that company for six seconds?

The sense of business as usual is everywhere. The bank UBS paid its CEO almost $9m last year and gave its new investment bank chief a £26m kiss on the cheeks as they were firing 10,000 staff.

Banks in general shed staff last year but paid more out in wages. You don't need to be an expert in economics to figure out the trend. Two thirds of banks increased the amount they paid their staff. They didn't make more money as businesses, they just took more for themselves. Profits down, pay up. The banks own preferred yardstick, which measures staff expenses against revenue was up in 18 of the 35 banks that Reuters investigated.

There is a redoubtable lady called Joan Woolard who last year was unable to pay for flowers for her husband's funeral because her bank, Barclays, cancelled her jointly held credit card without warning, following his death. Her complaints were dismissed by the "Go-To" bank, so she bought ten pounds of shares and travelled from Lincolnshire to Go-To tell Barclays what she thought of them in honest, earthy, rural language. She gave Bob Diamond a piece of her mind. Who has not wanted to do that at some point in the past year?

This year, our heroine returned to Barclays' AGM to explain to the board that they are, and I quote: "greedy bastards". Why have no bankers been jailed, she asked, why are they still dishing out seven figure pay packages to themselves when she can live quite reasonably on £726 a month? How can they sleep at night, she wondered aloud.

I imagine the answer is "just fine thanks", on their Irish linen covered, artisanally hand made beds in their soundproof and air conditioned master bedroom suites, in the better end of Chelsea. And as for £726 a month, they must have thought that she said £726 for lunch. That they can understand.

The new Barclays chairman is Sir David Walker. Isn't it always a "Sir" ? Where are they getting them all from? Is there a machine in a bunker somewhere that's stamping them out like toy soldiers? Sir David listened politely and gave the answer that we all wanted to hear. He said he agreed that Barclays overpaid in the past and that it is "not going there again".

In other news, Barclays has just paid 428 of its staff over a million pounds each and given a happy hi-how-are-you to its new chief executive that includes a £1.1m salary, a possible £2.75m bonus and a £4.4m incentive package. Shall we assume that the "possible" comes to pass?

Apart from the obvious, the main difference between the Shareholder Spring and the Arab Spring after which it was named, is that the Arab Spring actually made a difference.