Wednesday, 6 June 2012

Bank staff costs take bigger share of pot

Quite a few accounting conversations on balance sheet definition of equity, and an interesting intellectual debate on capital owners, shareholding and value creation.  Surprised again that economic theories don't really work?

I guess the question is when common sense and markets fail, who's to intervene to ensure most people get a fair deal out of the system.  No society can only have winners but current wealth distribution trends are not sustainable.

Most readers will agree, through personal experiences or by reading stats, that corporate bosses are paid well in excess of their performance, relative to the other employees.  Most readers will also agree that shareholders have neither the interest nor the power to change this.

This culture of entitlement (just refer to Martin Sorell's obscene "defence") can only be transformed by regulation.  Will a radical change happen because politicians want to deliver a better society for everyone?  Will they make anything more than cosmetic surgery till the next election?  The past decades tell us the chances are really slim.

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