04 July 2011

R316 000 a day!

Call me a socialist, but I do not think there is anyone on this earth, ever, who is worth R316000 per day on an ongoing basis, says Susan Erasmus. Come on, guys.


Call me a socialist, but I do not think there is anyone on this earth, ever, who is worth R316000 per day on an ongoing basis, says Susan Erasmus. Come on, guys.

Everyone has their moments of glory: astronauts, transplant doctors, even politicians, writers, or even politicians and investment bankers. Maybe for one day someone can be worth staggering amounts. But every day? I don't think so.

Nissan boss Carlos Ghosn is the highest-paid foreign executive in Japan, if his salary and stock options are combined, Nissan's annual shareholders' meeting has been told. Roughly R82-million a year - or R316 000 per working day, according to a report on Wheels 24.

There is something called the CEO/worker wage gap. It makes for depressing reading. In 1950, top executives in the US earned 24 times the average worker's pay, in 1990 a 122 times and in 2009 550 times. This gap seems to be growing, not narrowing.

By all accounts things are no different in SA. In fact, the Financial Mail provided the following stats in 2010: in medium-sized SA companies — a company with between 1000 and 2500 employees and a turnover of between R100m and R500m — the ratio between the highest and lowest paid stands at 55:1, after reaching a high of 58:1 in 2008.

Many things determine salaries: your education, your experience, the skills you have, the level of responsibility you carry, and how easily you can be replaced. There's nothing wrong with that. Education costs time, effort and money and experience doesn't come cheap either. Some jobs are just more difficult than others, and carry huge responsibility that translates into sleepless nights and accountability for the person in that position. I get all of that.

I also understand the whole thing of market forces and paying people competitive salaries in order to attract the best. But that's just playing a mug's game. If cash is what someone is after, there will always be someone out there who will and can pay them more. Once bought, they will stay bought – until someone better comes along. It's a bit like when a man marries his mistress: she will always know that he was prepared to cheat on his previous wife.

By all means pay people a more than comfortable wage, but it gets to a point where it simply becomes ridiculous. Private schools, fancy houses, luxury holidays, interior decorating extravaganzas: you can only spend so much. Money buys financial security, sure, but there's a lot it can't buy.

I mean, how guilty does Carlos Ghosn feel if he calls in sick? To spend a day in bed would cost him/his company R568 per minute. Many people don't earn that in a week. Sure, they don't have his level of responsibility and Ghosn probably won't be in his position for long (these people seldom are), but the cleaner also has to get up, wash, travel to work and make an effort once he gets there. Is his effort only worth 0,1% of that of a CEO's? Something just doesn't feel right to my socialist heart.

Now how on earth would I go about spending such an obscene amount of money if someone were to offer it to me? Especially in a country like ours where the enormous gap between the poor and the wealthy makes it an unattractive prospect to flash your cash. Maybe I am a complete pleb, but jewellery, Italian shoes, 5-star hotels and my own island or two can only hold a temporary fascination. The thought of a fleet of luxury cars also doesn't really appeal. One would be enough. Maybe two. Throw in a small yacht – what the hell. But that's it.

I know one could do a huge amount of good with the money, but it can also quickly become a burden. How much time off do you think Bill and Melinda Gates have now that they've started their charitable foundation? In fact, do they even get to go on holiday ever?

It would probably have made much more sense if a company such as Nissan were to pay everyone more fairly from the start, and spread the goodness by making their cars cheaper.

OK – here's the deal: I am prepared to do the job of a CEO of a staggeringly large company for a month or two at 10% of what he/she currently gets paid. I am reasonably efficient, have an instinctive understanding of financial matters and I can write columns. Any takers? Please form an orderly line.

(Susan Erasmus, Health24, July 2011)

(References:; Financial Mail)




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