Βι¶ΉΤΌΕΔ

Robert,
I don't think anyone objects to a business person being rewarded for his or her efforts. If they have earned it, let them be paid. As long as the company can afford it.
I'm sure we all wish we were in the same position.
It is the current attitude of being paid for failure which annoys most people (the previous head of RBS being a prime example).
If we stopped rewarding people for incompetance then the country would be in a far better condition than it is today.

I suppose once again we have to compare someone who has successfuly managed a business which employs lots of people and pays huge taxes to the state against a load of transient footballers and celebs who employ?

Well no-one!

Yet we never hear the cries of Unfair! Unfair! from the public about their huge salaries and where they pay their taxes or not.

So it must be all right for those who entertain to become millionaires but not those who are keeping the workforce employed so they can afford the high prices they pay to watch these entertainers.

It's all a bit crazy but that seems to sum up the state of the country at the moment.

No wonder then that this is no longer seen as a good place to do business. Chase out the millionaires and their businesses and we all end up with? Nothing!

Β£92M? I wouldn't get out of bed for that! I'm better off on the dole. Good luck to the man if it's a reward for genuine success but it seems an awful lot just for making stain removers. Vinegar & lemon juice work just as well.

Robert, surprisingly you failed to point out what most sensationalist journalists have missed out on purpose; Bart Brecht's 92 million was based on pay accrued over a number of years, not just for one year. (The same goes for Bob Diamond.).

Bart's ACTUAL pay for last year was a Β£1 million base salary with a Β£3.5 million bonus. The rest came mainly from the exercise of share options accrued over many years as well as some performance-based shares.

It is highly unlikely that he will get such a salary next year. If this information was properly explained by journalists then maybe the public would be less anti-business than it is currently.

Sorry I fail to see how anybody can justify this bonus.
His workers made the business successful by hard work, yet the figure head takes all the cream. Are we really turning in to a bunch of self centred selfish people?
Greed is greed be it in the city or at the top of a large business.
While the ordinary guy in his factory is struggling to pay his mortgage and feed his kids we get this rubbed in our face.
Its the me me me culture at its finest or should I say worst?

If he's so good, why don't we just get the BoE to print up another Β£1Billion and pay him it to run the country?

He could use some of that Vanish stain remover on Westminster...he'd need an awful lot though!

Straight evil

Interesting article, but I have a couple of questions about one of your statements.

"The owners of that consumer products company, its shareholders, think he's worth the wonga."

My impression was that shareholders have no real influence on how companies are run, and especially not on such a detailed level as salaries.

Furthermore, given today's shareholders are largely not interested in a company's performance (being far more focused on the share price moving up/down depending on their expectations) I can't see who would use that influence even if it did exist.

Yes all chief Charlatans should be paid excesses in relation to their level of scullduggery.

I mean with Mr Rose's replacement - who wouldn't justify a Β£15m starting salary for someone who (if they mess up) will get a big fat payoff and a golden handshake out the door!

Market setting wages is just another nail in the coffin of 'markets know best. If there were free and open interviews for these jobs then I'm 100% sure the salary level would fall (I mean my local newsagent knows how to run a few shops - and he would do it for far less than the current rate, but strangely M&S weren't interested in his application)

I am at the top of my industry and I can assure you any monkey who can type can do this (I mean I spend half my time on this blog and yet I still have a job!!) I am surrounded by 'average ability on superior wages' (and to be honest a fair number are below average ability).

How many people on this blog were offered the post at M&S? Did any of you turn it down because it was beneath you?

If you did get the job would you:
a) Try hard to prove your worth and justify your salary
b) Do a little, but spend most of your time schmoosing at the golf club.

If you answered a) then I'm afraid you're not the right man for the job.

I told them at school that any idiot can make a lot of money - they didn't believe me - so now I have proved it by making a lot of money by being a greedy idiot.

The things I have to do to prove a point. I would have been much happier staying unemployed and inciting the people to revolt against the system oppressing them - rather than demonstrating what a pathetic and unbalanced system it is.

Digusting!
There are millions people in this world who have no shoes, no access to clean water and sanitation, and pregnant women die in childbirth for the lack of the most basic healthcare, children who can't go to school because the don't have the tiny fee of eight dollars.

There are people, millions of people in this country who want to work but have no job, there are miners in Congo who are lucky if they can make a dollar a day (and without them, where would his company be - using the morse code and old analog phones!).


Unlike many bankers, Becht seems to have been rewarded for taking the right kind of risks.
His skill is in gambling, it seems. He's only been gambling on Red Rum offspring at best. Is he complaining about NI increases?

If he was a 'good boss', he'd be investing that money and creating more jobs, either directly himself or by giving it all to Darling and his global equivalents for investment in infrastructure. What else can he do with it, sit and count every last penny?

Only socialists don't like success, aspiration or ambition.

Very clearly he has earned his money based on the success of his achievements. If I were a shareholder I would be pleased as punch.

It shows the gulf between some political parties and their understanding of business and it is getting wider every day. If only they could understand that with success comes wealth, growth and employment.

You don't suppose he would consider managing a country? Or group of countries?

I understand there is a position available.

1. At 3:28pm on 08 Apr 2010, EuroSider

But Eurosider - when you agree the massive pay scale at the beginning - and there is no means of 'clawback' then what do you expect when things go badly.

If you want evidence of a tarnished system, then ask yourself why CEO's from boards of failed companies always manage to get work elsewhere?

Bad tradesmen get a reputation and go out of business and get sued, poor shopkeepers annoy their customers and follow the same route - but bad CEO's just get chance after chance after chance - surely this is not a 'survival of the fittest' system as is claimed?

Who judges whether someone has done a 'good job' - it seems to me Stuart Rose's 'judgement' has come from the bottom line. However as we have seen with bankers, mortgage advisors, CEO's, Harringey social workers etc. the bottom line is not really a good indicator of 'doing a good job'

That Β£92m hasn't just spring out of mid-air. It has come from company earnings, which could have rewarded shareholders more - including my pension funds which will not pay out anything like the expectations of a few years ago. So thanks to the self-serving 'remuneration' committees stuffed with people with their own greed to protect that allow these bonuses and share options, we all suffer and I for one will just have to go on working past 'retirement age'. The trouble is that most pension funds only invest in FTSE 100 companies and how many of them are run by people who aren't just motivated by greed and self-interest to the ultimate detriment of staff and shareholders alike?

Bankers who had to be bailed out by the taxpayer are fair game.

Other folks are only game for the shareholders IF they destroy shareholder value.

4. At 3:41pm on 08 Apr 2010, TheD wrote:

"It is highly unlikely that he will get such a salary next year. If this information was properly explained by journalists then maybe the public would be less anti-business than it is currently. "

Oh of course you're right - the public are all earning a million a year with a bonus of 3.5m these days - now we understand and the wages are fair and are in line with the rest of us.

Don't you ever wonder how a system can be sustained where such vast wages are paid to a small amount of employees - whilst the majority have to take pay cuts?

Is Mr Becht sooooooooo clever he can run the entire company single handedly? - if he can, then he truly is worth the money.

However as with most highly paid people - their skill is in telling others what to do and then not paying them full value for thier labour efforts (and if he's really god he will make the employees feel grateful for employing them) - because the workers do not realise (yet) that they don't need to be told what to do in order to complete neccessary tasks and that people like Mr Becht are in fact a hinderance and not an enabler.

2. At 3:37pm on 08 Apr 2010, virtualsilverlady wrote:

"I suppose once again we have to compare someone who has successfuly managed a business which employs lots of people and pays huge taxes to the state against a load of transient footballers and celebs who employ?

Well no-one!"

Come one VSL - have you never seen Beyonce's entourage? - she employs more people to do her hair than this Government employs to spin doctor the truth!

3. At 3:39pm on 08 Apr 2010, bobxmerrison wrote:

"Β£92M? I wouldn't get out of bed for that! I'm better off on the dole. Good luck to the man if it's a reward for genuine success but it seems an awful lot just for making stain removers. Vinegar & lemon juice work just as well."

Oh yes - this is why he is paid so much because he really is chief charlatan - we all know that putting a calcium covered penny in any acidic mixture will have this effect - but he managed to fool millions of dumb housewives!

Roll up, roll up, come and buy my amazing 'cleaner' which is guaranteed to wipe every nasty germ off the face of your bathroom.
(Cleaner is sulphuric acid based - do not get into eyes, or onto anything except dirt as it may cause damage)

8. At 4:05pm on 08 Apr 2010, Thomas Metcalf wrote:

""The owners of that consumer products company, its shareholders, think he's worth the wonga."

My impression was that shareholders have no real influence on how companies are run, and especially not on such a detailed level as salaries."

Oh yes, like Adam Applegarth was deemed 'worth it' by the NR shareholders, and Freddy Good-windup was deemed 'worth it' by RBS shareholders - I mean even Labour were 'worth it' when they got elected in 1997 - not so much now though eh?

I've just looked on Reuters to review the Reckitt Benckiser (RB.L) share price growth over the last 10 years and up until 2008 the performance of Reckitt Benckiser was comensurate with the overall FTSE 250 Index! (granted Reckitts have MARGINALLY outprerformed the market over the last two years)



Which just goes to prove that even if Bart Simpson had been at the helm over the last 10 years...then he would most probably be walking away with a large chunk of a Β£92m bonus pot instead!

Just think of the (Β£92m * 50%) Β£46million in income tax plus a bit in NI.

oh, hang on, as pointed out above only Β£1million is salary and the rest is share options which are taxed under CGT, so then...

Just think of the (Β£1m * 50% + Β£91m * 18%) Β£17million (ish) of tax and relativly nothing in NI.

Wish my tax rate was that low.

10. At 4:07pm on 08 Apr 2010, copperDolomite wrote:

"Digusting!
There are millions people in this world who have no shoes, no access to clean water and sanitation, and pregnant women die in childbirth for the lack of the most basic healthcare, children who can't go to school because the don't have the tiny fee of eight dollars."

But copperDolomite - these people 'create wealth' - surely they are far more intelligent than you or I. I mean they are the real alchemists of their time - but just remind us what happened to Alchemy again?

If you're lucky he might 'make a donation to charity' in the form of an amount which seems like a massively generous donation to your and my meagre wages - but is actually a tiny percentage of his salary.

Then we can hoist him up on his chair and parade him round town as some form of 'saviour' - and he might even throw us some sheckles if we're lucky. who knows - he might even be a Lord one day.

Poor old Stuart Rose having to get by on a paltry GBP 3 million. I don't know how these people manage!

I would have thought for a return on capital employed the chemical company of Mr. Becht is going to be vastly more successful than Marks. He has no high street stores to buy, staff and keep stocked up. A nice JIT manufacturing process of cleaning products from vendor and partnership factories at strategic locations around the globe sold as brands by a slick marketing operation has far more profit potential than retail.

This is how Mr. Becht has done so well for himself. Right product, right place, right time, nothing complicated. All the targets in a row. He has made his financial backers happy and so they fill his boots with the largesse he has gained for them. His gains are not ill-gotten so I have no quibble with that: it is the name of the game. I doubt even if Stuart Rose will either.

I have a cautionary view as to the value of his products and the environmental consequences of the manufacture and use of them. Yet there is a strong argument that these add to the quality of the human condition so another win for Mr. Becht.

By and large it is not the Mr.Bechts of this world which are the problem: it is the people who demand large sums of money under false pretences describing it as compensation for their time at work. No doubt Mr. Becht has a product that deals with parasites.

11. At 4:10pm on 08 Apr 2010, sircomespect wrote:

"Only socialists don't like success, aspiration or ambition."

The problem with Capitalist is they can't see success, aspiration or ambition without there being an incentive of wealth accumulation at the end of it. "Pay me or I do nothing" seems to be the attitude.

"Very clearly he has earned his money based on the success of his achievements. If I were a shareholder I would be pleased as punch."

Yes, I'm sure shareholders of RBS were 'as pleased as punch' as the bank took over ABN Amro. However considering these 'shareholders' are in fact part of the same nepotisitc network then I would suggest they are pretty much 'pleased as punch' regardless of what profits are made.

"It shows the gulf between some political parties and their understanding of business and it is getting wider every day. If only they could understand that with success comes wealth, growth and employment."

Mmmm - not sure really - I know people who are successful but don't have 'wealth growth and employment'. I know a man who built his own house from scratch - inspired he was - didn't need a financial incentive to achieve it and now he owns his own home in which he raises his family. Unfortunately in the Capitalist world this man is not a success as he does not have a giant bank account to fool people with.

I think it shows that the Capitalist defence is getting weaker and weaker as we all assumed these grand Czars were paid a fortune because they were good - but now the kings clothes have fallen off and all they do is blame each other.

"You don't suppose he would consider managing a country? Or group of countries?"

Of course he wouldn't - you said before he needs 'inspiration' - which only comes from the temptation of 'making profit' - why would he slum it on the Β£150k the Prime minister gets for a lot longer hours and a lot less reward?

You see - the problem with Capitalists is they are essentially lazy and lack self-motivation. They are also very shallow as they cannot see why the inequality of wealth will eventually lead to collapse.

11. At 4:10pm on 08 Apr 2010, sircomespect

I know a few socialists and they love success. People like Rosa Parks, Dr Barry J. Marshall and Dr J. Robin Warren, or how about Ghandi, Mandela, or every single graduate in this country who have successfully completed secondary school then their degrees, or the plumber who has succeeded in completing his apprenticeship?

Success is not millions in earnings from gambling on risks. Gamblers mark that as success while their doctors label it a potentially very damaging condition to be treated before it destoys the life of those who suffer from it.

22. At 4:44pm on 08 Apr 2010, stanilic wrote:

" A nice JIT manufacturing process of cleaning products from vendor and partnership factories at strategic locations around the globe sold as brands by a slick marketing operation has far more profit potential than retail."

Now lets be careful about JIT - sure it shows efficiency (by the savings) - but it doesn't show the consequences.

The supermarkets operate a JIT delivery system - do you know how long it would take for a transport strike to empty our shelves (assuming nobody panic bought) - about 1.5 weeks.

...and when that happens, will we all be applauding the JIT approach for it's efficiency? - or will we be rioting on the streets at the folly of our businesses to put cost saving over any kind of slack in the system?

...and no sooner did I finish typing the last blog and this appears as headline news:



JIT eh? well lets hope the deliveries continue - luckily our Economy isn't based on fue........whoops.

21. At 4:40pm on 08 Apr 2010, writingsonthewall wrote:
But copperDolomite - these people 'create wealth' - surely they are far more intelligent than you or I.

Nope, can't be. I was rejected for a job last week. I was told I was too clever for the job. Think that meant I'd see right through their game? Hubby thinks bosses don't like to hire people, especially women who are smarter than themselves and that I should just lie on my CV, do a bit of dumbing down of my own! If he is right, then they aren't clever at all, more like refusing to get the best value for money while they cover up their own failings.

Robert, I have never met any man, other than one that invests his own money and makes a fortune, who is deserving of more than Β£200k/yr. This man is an employee and should be treated like any other.

The sooner Directors start to understand shareholders are sick to death with over payment and under performance the better. The real winner apart from Mr Brecht is HM Government whose tax take from his pay, assuming he is not a "non dom".

Better we get sensible pay for all where the CEOs and directors pay is limited to say 100 times average UK wages the better for us all.

21. At 4:40pm on 08 Apr 2010, writingsonthewall wrote:
If you're lucky he might 'make a donation to charity' in the form of an amount which seems like a massively generous donation to your and my meagre wages - but is actually a tiny percentage of his salary.

Then we can hoist him up on his chair and parade him round town as some form of 'saviour' - and he might even throw us some sheckles if we're lucky. who knows - he might even be a Lord one day.

Sounds like the man parading around town with no clothes on....

25 writingsonthewall

Nothing wrong with JIT manufacturing as it cuts out waste: kaizen!

There are issues with JIT in other markets as it can easily become JTL: or just too late! The supermarkets have to work with it otherwise their warehouses will have to multiply in size to cover the land we will need for growing food in the years to come.

If about ten days food in the supply chain bothers you then there is the 40% and growing proportion of our food which we import.

How about that in a sterling crisis, the pound dropping and the cost of grub going through the roof? Not good: this exposes the folly of all the so-called economic policies of the political parties. Why worry about National Insurance when all you want is to fill an empty belly!

"Take Stuart Rose" a lot of shareholders of M&S have been saying this. It is under his chairmanship M&S share price has fallen from Β£6.77 to Β£3.77 in 3 years.

Sorry VSL but it is not these guys who keep the workforce employed, they would gladely "lose" as many people as they can, its the workforce who keep the management in jobs.

"entrepreneurial owners"

Do you still get them?
Silly me. Entrepreneur has been replaced by spiv.
I must have been dozing for the past 20 years.

If the shareholders are upset they could complain or sell the shares all at once to drop the price. If who ever set the package including such a bonus is upset, why did they agree?
If on the other hand he has delivered what was asked and more, well why not?

Irritating to know about this this but what can I do?
If on the other hand, like some MP's the claim has a bit of a smell about it then by all means moan, and I will to.
I think there are much more worries to come out than throwing myself into a Daily Mail rage on this news.

5 years ago the market value of Reckitt Benckiser was Β£8bn or so. Now Β£26bn.
The 'salary' will be from crystalisation of options, ie, delivery of targets.
That is during a recession and Northern Rock went from Β£12 per share to 0.
So, Β£92m for stewarding Β£18bn of value growth, oh and cash on the balance sheet?
How many jobs are being created? 23,000 employees and growing.
Give him another Β£92m and make him Prime Minister.

The phrase 'unacceptable face of capitalism come to mind'!

Yet another reason why we 'need' a society, and a society that has a National Maximum Wage! This must be what they mean (and I do know where the expression comes from so don't tell me - and I know I an misquoting it!) private property being theft!

And yes, it does actually matter.

27. At 5:06pm on 08 Apr 2010, copperDolomite wrote:
" Hubby thinks bosses don't like to hire people, especially women who are smarter than themselves and that I should just lie on my CV, do a bit of dumbing down of my own! If he is right, then they aren't clever at all, more like refusing to get the best value for money while they cover up their own failings."
==============================================================

Wait. Are you saying CopperDolemite is a (female) vessel.
Well blow me over. Who'd a thunk that. I ask you.

Hi Robert.
You say that of this particular plutocrat, "Unlike many bankers, Becht seems to have been rewarded for taking the right kind of risks." Can you let us know what risks he has actually taken? How much of his own personal wealth has he ventured in these "risks"? What were the prospects of his finding himself on the dole queue having to draw benefits if those "risks" had not paid off? Or would it only have been the employees who would have suffered? Have they played no part at all in the company's success?

So, plenty of money to pay Euro-lottery sized salaries for CEOs; but none to pay National Insurance. Hmmm.

This comment was removed because the moderators found it broke the house rules. Explain.

Weak shareholders
Weak Boardmembers
Lack of shareholdership
Golden ladder and golden trough.
Constitutional reform needed right through to chnages in Company law.
Is he really 20-30 times better or of more use than e.g. our best brain surgeons or heart surgeons
Its no use Labour and Lib Dems condemning the Conservatives as too close to the City when they all stay silent on this.
I'm not silent because I'm not a member of any political party and will not be gagged.
But the remuneration level here is obviously obscene.

Answer = perhaps.

I mean he does seem to have delivered actual outcomes which will have delivered many benefits to shareholders and employees of the organisation.

Unlike certain bank managers he doesn't seem to have nearly brought the food and cleaning product industies to the edge of collapse globally.

And he doesn't seem to have had to play a whole lot of political games to achieve his outcomes.

I'm struck by the other story in the news today as to how the 'right to collective redress' is being abandoned to get the Financial Services Bill through. Oh and 'compulsory financial education in schools' is also being dropped.



So, Parliamentary admin needs are more important than the good of the UK economy, or ensuring that UK citizens are treated fairly and have proper redress against cowboy financiers. 'Tis a shame Parliament can't be as "outcome-focussed" as Mr Cillit Bang seems to be.

I can remember when it so nearly went phut instead of Bang.

I actually bought a bottle of the stuff in my local super market.
It was either being sold real cheap as an introductory offer or - my recollection - was being sold off real cheap as a failed product. That was years ago.

I still have it under the kitchen sink..

Obviously the power of marketing eventually took hold and the rest is history.
So. Is it a good product or was the marketing good?
Either way it is selling.
I wonder how much I would get for my bottle on ebay?
Little used. One miserable owner!

The more guys you have at the top who think there is nothing wrong with paying themselves 6 and 7 figure salaries...the more people in their companies you'll find working on or very near minimum wage. The money for the execs wage bill has to come from somewhere! The lack of common decency,basic morality and humanity of some of these execs is just staggering.

C'mon guys, you just sound like you hate anyone whos earns more than you.

If he's increased the value of the company, jobs and profits during recession and shareholders think he's worth it, then good for him!

43. At 10:14pm on 08 Apr 2010, bpx wrote:
C'mon guys, you just sound like you hate anyone whos earns more than you.

If he's increased the value of the company, jobs and profits during recession and shareholders think he's worth it, then good for him!

Which is just the kind of argument that turned our economy into a pile of rapidly rotting horse manure. Sorry - it is not "hatred" to suggest that huge inequality is unjust. Nor is it "envy" to suggest that an extreme gap between the wealthiest and the poorest members of society is unhealthy for that society. Not is it "jealousy" to suggest that a corporate employee earning Β£92M is obscene when business is complaining that it won't be able to pay its pay its tax bills without leaving some of the poorest members of our society out of work and on the scrapheap.

41 prudeboy
"Obviously the power of marketing eventually took hold and the rest is history.
So. Is it a good product or was the marketing good?"


I've always assumed cillit bang was a case of bad spelling for kill it bang.

According to the Βι¶ΉΤΌΕΔ report on its popularity, the name has contributed to the success of the product because people are intrigued.

Which just goes to show that bad spelling will get you far. Think of companies like toys r us or f cuk. The power of bad spelling is mesmerising.

It probably means that if BA and Iberia rebranded themselves as Brainish Airways or Banish Airways they'd be unbeatable!

Reckitt Benckiser is much more than a household cleaning company and you would be hard pushed to come away from your weekly shopping without at least one of their products in your shopping trolley (the entry in Wikipedia lists just some of the products made by them). Much of their profit is derived from pharmaceutical products and there have been allegations in the past (reported by Βι¶ΉΤΌΕΔ's Newsnight) that they have made substantial profits from the NHS by attempting to delay the introduction of a competitive, generic version of one of its most popular products, Gaviscon. Of course there was nothing illegal but it just makes you think, who funded much of their success?

This company has many thousands of employees. The vast majority will not be paid anything like Β£92Thousand, let alone Β£92Million.

There are still 24 hours in the day. He did not work a thousand times longer, harder or smarter than any other employee. In other words someone, thousands even, did this person's work for him. OK, so this company's share price improved over a long period of time, it still does not mean his pay should be Β£92m. Did those thousands of other employees not contribute at least equally to this performance?

Why isn't Becht saying, "hundreds more in this company should be paid what I'm paid?" Or a half or even a quarter of what I'm paid? How come only he is worth this??

It must be a chronically sore point to these bosses and others who say, good luck to him, that other organisations have very different ideas about what is fair, rational and genuinely valid. If John Lewis has a straightforward "formula" of the MD being paid no more than 75 Times that of the lowest paid, then Reckitt paying more than a 1000 times strongly suggests someone must be wrong! Insulting to those who do the actual work for Reckitt, surely? It isn't the Β£92Million that's necessarily wrong, it's THE DIFFERENCE between the persons earning Β£92thousand (or less,) and the one earning Β£92million that is outrageous! It isn't good on you, it's SHAME on you Becht! There is absolutely no sense of proportion - it's just grasping greed!

It's incumbent on our politicians to stop this happening. Shaming the bosses at the very least. Where there is excess, too much smoking or drinking, there will be people squealing for it to be taxed. When pay becomes this disproportionate, this excessive, it's right and sensible to tax it in such a way that it is moderated. It would be vulgar and obscene - politically unacceptable not to!

(Thankfully it does not matter too much that the Becht's of this world are "enlightening" the Tory party at the moment, as they won't win.)

11# Success is all well and good, even if it involved educated gambling - Β£92 million,however,is offensive not just to socialists but to anyone with morals and a conscience.

There is more to being an entrepreneur than risking your own money, Investors risk money, entrepreneurs create wealth, and there is a very big difference. Businesses don't build themselves, and large businesses need a lot of capital, so Investors back an entrepreneur to build the business. They provide the cash, and he multiplies it.

Mr Brecht is not 'an employee' he is an entrepreneur who is so good investors trusted him with their eight billion investment and he grew it to twenty four billion for them. Who wouldn't pay a man 92 million to do that?

In fact Mr Brecht gets paid Β£4,336,000 a year all in. He is responsible for creating 23,000 jobs. If the company had no CEO at all and magically ran itself without leadership then each member of staff would get an extra Β£188 a year.

I bet if you asked the staff whether they would prefer to replace Mr Brecht with his track record of creating jobs and bonuses for the staff with a nice Civil Servant on Β£150k a year and offered to pay them an extra Β£3.50 a week each they would laugh in your face.

The problem with socialist envy is that overlooks the fact that we need leaders and leaders don't work for free.

I think although the Β£92 million he got from exercising share-options will make headlines but he took the company from 600p to Β£30+, which doesn't happen due to natural market forces, he also donated over Β£100m to charity I can't see the downside.

For all those commenting on the 'ease' of making a profit in manufacturing versus retail - just look at the number of manufacturers who have gone bust in the UK over the years. Note, that typically, whilst a manufacturer makes higher % profits, their invested capital is much higher than a retailer (who may not even own their own stores)- as evidence, look at the ROIC of top retailers and manufacturers.

It makes me wonder what on earth any man could do with so much money? I mean 92 mil isn't far off 2 million a week!

How could you ever spend that? Its insane. I don't have a problem with business men being rewarded etc but that is such a large sum of money it seems almost pointless.

I mean if say he only took home 52 million (1 mil a week) would he really notice the difference?

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I think some of you are missing the point here, the market for CEO's works much like the transfer market in football. Mr Brecht isn't collecting 92 million quid because he needs it to fund his lifestyle, when he was negotiating his contract he would have looked at what the 'going rate' for CEO's at similar sized businesses was and their incentive packages and asked for something similar or slightly better if he thought that Reckitt were desperate to 'sign him'. Like it or not,just as in football there is a small pool of players who can actually make a difference to a team's performance and are valued accordingly. The same applies in the boardrooms of major companies. The cheapest way to change CEO is to have a specific individual groomed as a successor from within the company (like bringing on someone from your youth team in football), unfortunately this isn't possible for some busineses where the shareholders demand a 'big name' for reasons of prestige or just as a 'safe pair of hands' and that person will see what the heads of other businesses are getting and demand at least the same starting remuneration, with incentives bolted on.
Frankly, bleating on about how nobody is worth this kind of money is futile, employees are worth whatever anyone is prepared to pay them, no matter how 'obscene' the amounts look to the average punter..

Here we go again!
Full steam ahead and ignore the icebergs.
What short memory's our 'gamblers' have!
Still if anything goes wrong then the workers will bail them out and they can move on to even bigger 'rewards'.
Something wrong somewhere!

This rule that you have to pay successful senior managers lots of money would have a lot more credibility if it wasn't for the fact that unsuccessful senior managers also get paid lots of money. The fact is all senior management pay themselves the going rate, which they set, and is generally as much as they can get away with. Useless senior managers cost the private and public sectors billions, yet the worse that ever happens is they are paid even more money to go elsewhere.

The man increases the share value 6x so if he started with only Β£15m in shares that would be Β£90m today, doesn't seem that bad if you think of it that way.

This comment was removed because the moderators found it broke the house rules. Explain.

Unless Bart Becht has discovered how to turn base metal into gold, its safe to assume any number of people could do his job for a thousand times less.

"2. At 3:37pm on 08 Apr 2010, virtualsilverlady wrote:
I suppose once again we have to compare someone who has successfuly managed a business which employs lots of people and pays huge taxes to the state against a load of transient footballers and celebs who employ?Well no-one!"
Footballers do create wealth for their clubs by through gate receipts, merchandising, and TV rights. They also get sacked if they don't perform and end up being paid a few hundred quid a week to play for Hartlepool.
Compare them with say Fred Goodwin, who got his team relegated, burnt down the stadium, and still got a premier league salary.

If Becht resigned, it would wipe a lot more than Β£92 million off the market value.
Look what happened when Bolland resigned from Morrison's to go to M&S. He was referred to as the Β£1bn man as Morrison dropped Β£500m, and M&S went up Β£500m.
Everyone bangs on about the Β£15m buy out he got. (which will be delivered on performance attainment)

It is scandalous that anyone anywhere should have that much money when there is so much suffering in the world. I don't earn a great deal but I still manage to give a % away to those less fortunate than myself.

It should be a crime to possess so much money

DebtJuggler, can you show me that the FTSE 250 has more than doubled since 2005? No, I didnΒ΄t think so. Not since Labour has trashed the UKΒ΄s finances.

He has earnt these share options over a period of 5 years and are only worth such a considerable sum if he delivers strong returns for shareholders - which he has done considering the share price is now more than 5 times higher than it was 10 years ago upon floatation.

Case closed. Move on.

Oh and those that highlighted the suffering in the world that persists while he earns these millions. He has donated over 100 million pounds in recent years to charity. What an awful chap.

55 mischievousCheesy101
" Like it or not,just as in football there is a small pool of players who can actually make a difference to a team's performance and are valued accordingly. The same applies in the boardrooms of major companies."


If I were a top footballer, I'd be insulted by the comparison you make with so-called top businessmen.

For all we know, the way it works in business seems to go like this - you get paid to keep your mouth shut and play a game, but it's not football. If you squeal you're out. If your performance causes problems and you don't squeal when you leave the company, your future prospects are going to be looked after by the "team". There are only a few chosen to belong to this inner sanctum and the rest are mugs.

If someone is really so irreplaceable and valuable to warrant a Β£92,000,000 pay packet, why isn't he a national treasure?

Re # 66 Starry-Toger wrote
'For all we know, the way it works in business seems to go like this - you get paid to keep your mouth shut and play a game, but it's not football. If you squeal you're out. If your performance causes problems and you don't squeal when you leave the company, your future prospects are going to be looked after by the "team". There are only a few chosen to belong to this inner sanctum and the rest are mugs.

If someone is really so irreplaceable and valuable to warrant a Β£92,000,000 pay packet, why isn't he a national treasure?'

Again, you are wilfully missing the point..The 92 Million represents what Reckitt believes he is worth TO THEM, not what anyone else thinks. As the only metrics that shareholders care about is profitability and share price then he has obviously done a great job as far as they are concerned. Of course its true that CEO's who perform poorly are also handsomely rewarded but thats because their contracts are cast in stone before anyone realises they aren't up to the job. People on here are just so bitter and cynical it beggars belief, over and over again I read that 'anybody could run these companies, its just an Old Boys Network that keeps the same people in employment regardless of how well they do'. This is palpable nonsense, I am a middle manager and pretty good at my job but if you told me that I would be running ICI fron next Monday I wouldn't have the faintest idea about what that entails. A simple description I found online of a CEO's responsibilities for a manufacturing company are 'Which markets will the company enter? Against which competitors? With what product lines? How will the company differentiate itself? The CEO decides, sets budgets, forms partnerships, and hires a team to steer the company accordingly.' Simples... When companies hire someone for a CEO position there isn't any training available, they are expected to know what to do already therefore the pool of qualified candidates is necessarily limited to people who have already held the same position somewhere else or have been prepared as a COO (Chief Operating Officer) to take over from the present incumbent. Just because you are excluded from this 'club' is no reason to villify those who have risen to the top in their chosen profession..

67. At 8:14pm on 09 Apr 2010, mischievousCheesy101

Well said and I agree entirely. In order to just make the short list you have to demonstrate an exceptional track record, not just the speculation that 'anybody can do it'. In fact judging by the mess most people seem to make of their houshold budgets most could not get through morning 1. The only exceptions I can think of to this general rule are the self made CEO's, Branson, Sugar etc or Nick Leeson (who didn't make it to CEO) and look how that turned out.

As for comparing this guy to a top footballer how about comparing the turnover of say ManU and Alex's wage to Reckitt's turnover and the CEO's wage. I think you'll find Alax is apparently exteemly greedy.

67 mischievousCheesy101 "Of course its true that CEO's who perform poorly are also handsomely rewarded but thats because their contracts are cast in stone before anyone realises they aren't up to the job."


I don't want to slight the work of anyone who's doing a difficult job well, whether they're in sport or business, but your point above is what raises even a naive person's suspicions. How come people are normally put on a conditional contract and these top people aren't?

Hiring the best for a job where there's no training available means you won't know if someone's a fake, which is all the more reason to be aware of what a bad contract could cost the company. Surely that's basic business sense?

69. starry-tigger

OK, here's the deal. Good CEO's have established a track record. They are headhunted, ie the board would like CEO of company A to be their new CEO of company B. CEO of company A is doing pretty good and it looks like he will continue to do so however company B want him, so he says 'here are my terms to quit the very good job I have and by the way not go to company C'.

Good CEO's and bad CEO's. If you get the chance watch Pirates of Silicon Valley. The story in a nut shell is of how Xerox invented the mouse, not to much of a difference from those early tennis games games you could play on your TV. However, amusing as it was they could see no use for it and Steve Jobs from Aplle happened to come by and take it off their hands. He developed the early Apple operating system centered around this 'pointing device'. One day Bill Gates drops by and Jobs can hardly contain himself, he has to show off what he has got to Gates. Gates is initially overwhelmed with how the mouse knows where it is on the screen and figures there must a host of electronics inside the mouse. Eventually he works out that there is nothing in the mouse (or at least not a lot) and then develops his own mouse and an operating system to go with it which we will call Windows(tm). The rest is history. Now who was the dumb CEO and who was the 'succesful' CEO. Whick one would you employ and on what terms?

Re: 69 Starry-Tigger (sorry, I got your handle right this time!)
As Uphios pointed out at 68 its only worth applying for one of these top jobs if you can show that you have done well somewhere else. Once the company says 'we want you' then comes the nitty gritty of sorting out a contract. As the company believes that the new guy is going to do a great job then the terms of the contract are set accordingly. Thats why the base levels of these peoples salaries are so inflated compared to what we mere mortals can negotiate. The Stock Options and performance bonuses are just gravy really, I mean if the share price quintuples over the term of Bart Brecht's contract (as it did) then obviously his stock options are going to be worth a fortune, but thats what incentives are all about.

Believe me I know where you are coming from and it seems like these people exist in a parallel universe divorced from reality but I can also understand that as long as there is a limited 'transfer market' for top executives then they will only negotiate their remuneration packages based on what they see other people doing the same job getting...which leads to a kind of vicious circle if you want to see some kind of wage restraint at those top levels.

He's not worth it, a company is more than the sum of one man.
In my eyes this guy is subsidised by the taxpayer(who isn't these day from football clubs to bankers) we top up his employees low wages to enable him to grab his millions.
His wage should be linked to the lowest paid employee say x10 max.

So how is it that in Japan a CEO only earns 11 times a worker's average wage (although this data is a couple of years old, I don't think it has changed much). In the USA it is 475 times; quite a difference.

Are Japanese companies run by inferior bosses?

There is something sick in the system. I don't think any shareholders would support golden handshakes. If a potential CEO has the right stuff, then why would s/he need one written into his/her contract?

It's good for us all that he has a massive bonus!
Have none of you heard of the 'Trickle Down Effect'?
I am waiting with confidence for my bit of the above effect.

It's curious that we have to pay CEO's of large companies so much when one can hire Prime Ministers, Senior Civil Servants, Chief executives of National Health Trusts and local authorities, Chief Police Officers, Generals, Admirals, Surgeons, University Vice Chancellors (drones on with long list for several hours...) for hundreds of thousands of pounds rather than millions. Are all of these people doing ridiculously easy job compared with private sector CEO's? Is running a Health Trust or a Police Force a doddle? Maybe one of these guys should be put in charge of our forces in Afghanistan?

I wonder if anyone can cite any examples of private sector CEO's being recruited into the public sector and making a huge difference? I don't recall that guy from Sainsburys doing anything so very remarkable with the NHS; in fact, intensive racking of brains over breakfast tea only seems to come up with Dr Beeching who managed to cut the railway's deficit by somewhat drastic measures. Anyone care to come up with suggestions of private sector CEO's who were so good at their job that they were able successfully to sort out Public Sector problems?

Again the politics of envy are out in force. Let's reiterate shall we? The 92m is from share options Mr. Becht has earned over the past 10 years. Had he not made the business as successful as it is then he would not have benefited as much as he has. This is not a short-term bonus for nothing, but a long-term reward, something that everybody, including St.Vince Cable, was recommending should be the case for bankers. What has also not been publicised is the fact that Mr. Becht gave 110m to charity last year and regularly gives a large amount of his income to charity. He normally shuns publicity for this but in light of the misinformed comments over this 92m then he's had to.

This is a CEO who has given his company's shareholders a 649% return since he took over in 1999, while the FTSE-100 return is negative (excl. dividends). So in my view Mr. Becht is worth every penny. If only we had more businesses as good as Reckitt Benckiser, and leadership as good as Bart Becht.

Good luck to him.
Why be envious or bitter of someone making millions? We should welcome and reward such success.

76 suchan104 "If only we had more businesses as good as Reckitt Benckiser, and leadership as good as Bart Becht."

Wouldn't it have been an even greater sign of good leadership if Mr Becht had shared Β£110 million with the employees of his company? They played a not inconsiderable part in building up the profit of Reckitt Benckiser.

78 starry-tigger - RB employees are well-rewarded for their services. If being the CEO was so easy then everybody would be running successful businesses. As it is CEO's as successful as Mr. Becht are a rarity and so he deserves his reward. What is important is that my pension fund (and I suspect many others around the country) will have benefited from the success of this business or would you rather your pension fund invest in Northern Rock or RBS? Also, if you knew anything about RB and how it has grown so well over the past decade then then you would know that it is due in significant part to the excellent strategic decisions made by Mr. Becht and the board of RB. Why is it you think that the most junior people in the company should be rewarded the same as the CEO but without the responsibilty?

TheWalrus999 wrote:
Good luck to him.
Why be envious or bitter of someone making millions? We should welcome and reward such success.

----

Ridiculous.

What has he done to deserve so much money when there is so much hunger, famine and disease in the world that could badly do with that money.