Superstar chief executives

 

Sir, – David McWilliams’s description of superstar salaries (“Why your boss earns so much more than you”, Opinion, Weekend Review, August 24th) fails to explore one key difference between soccer and opera stars on the one hand and company bosses on the other.

Liverpool pay Mo Salah £200,000 and change per week because he scores goals and if he wants to keep being paid, he needs to keep scoring goals – week in, week out. When Anna Netrebko sings at the Met Opera, it knows that it can raise its prices because she will still pack out the house – week in, week out.

Superstar CEOs, on the other hand, are playing by a different set of rules. In recent decades a long list of superstar CEOs have presided over immense damage to the companies they run, to the welfare of their employees and the wealth of their shareholders, but it can be years, and many millions of euro in pay and benefits, before their ineptitude comes to light.

When it does, they are often paid off with a handsome golden parachute.

Think of Carly Fiorina at HP or John Scully at Apple to name but a few. All former highly paid superstars whose tenure at the top resulted in massive wealth destruction.

Brian Goggin, the man who presided over a disastrous collapse in the share price of Bank of Ireland from €19 to 51 cent, was paid almost €4 million per annum at one point. Some superstar.

Many economists now realise that extremes of inequality are not good for economies (never mind societies). The rich simply do not spend enough to make up for the loss of spending power in the middle classes, never mind the bottom 20 per cent. Extreme inequality is not just bad politics – it is bad economics.

CEO superstars need to be brought back to earth. – Yours, etc,

FRANK E BANNISTER,

Dublin 4.