Capping bosses’ salaries will not raise salaries of people at the bottom | Kate Andrews writes for City AM

Head of Communications Kate Andrews writes for City AM:

Today’s briefing paper from the High Pay Centre (HPC) has zoned in on the gap between FTSE 100 chief executive pay and the average salary of UK workers in 2014: 183/1.

Perhaps it is the HPC’s emphasis – or perhaps it is the world’s recent focus on inequality - that has most people, in the media and elsewhere, focused on this divide. The assumption is that high executive pay is costing lower earners a pay rise, and that condoning people getting rich at the top is an endorsement of keeping people poor at the bottom.

But one does not cause the other; and while it is crucial that we tackle in-work poverty and address long-term low pay, capping executive pay will not raise the salaries of people at the bottom. Indeed, this could lead to negative consequences of its own.

Read the full comment piece here.

Sam Bowman's comments on executive pay feature in: Financial Times, Huffington Post & BBC News

Deputy Director of the Adam Smith Institute Sam Bowman's comments on high executive pay featured in the Financial Times, Huffington Post, and in a BBC News article: From the Financial Times:

But Sam Bowman, deputy director of the Adam Smith Institute, said: “Investors see executives as extremely important to the value of firms, with the strategic decisions they make often determining whether a firm flourishes or goes bankrupt. For that reason, it can be sensible to pay a lot to get skilled executives with good judgment.”

Read the full article here.

From the Huffington Post:

Business lobby group CBI said high pay was only justified by "exceptional performance", while think tank, the Adam Smith Institute reportedly justified it by saying the salaries rewarded "extraordinary talent and skills" and the good decision-making that is "as close to invaluable as one can get".

Read the full article here.

From the BBC:

But the free-market think tank, the Adam Smith Institute, was more forthright, saying that the right chief executive could make or break a company.

"CEO pay rewards extraordinary talent and skills in a highly competitive, globalised market," said its deputy director Sam Bowman.

"Good decision-making from the top might not be invaluable, but CEO pay reflects that it is as close to invaluable as one can get."

 

Read the full article here.

Kate Andrews debates milk prices on BBC 5 Live, BBC Radio Leeds, and BBC Radio Wiltshire

Head of Communications Kate Andrews debated UK milk prices, farming subsidies, and what is best for UK consumers on BBC 5 Live, BBC Radio Leeds and BBC Radio Wiltshire. Listen to the BBC 5 Live Breakfast Show interview here. (Starts 02:08:08)

Listen to the BBC Radio Leeds interview here. (Starts 9:48)

Listen to the BBC Radio Wiltshire interview here. (Starts 33:08)

Press Release | Executive pay: because they're worth it

For further comments or to arrange an interview, contact Head of Communications Kate Andrews: kate@adamsmith.org | 07584 778207.

Commenting on the High Pay Centre's briefing on executive pay, Deputy Director of the Adam Smith Institute Sam Bowman said:

Investors see executives as extremely important to the value of firms, with the strategic decisions they make often determining whether a firm flourishes or goes bankrupt. For that reason, it can be sensible to pay a lot to get skilled executives with good judgement.

It’s not hard to find examples on both sides: when Steve Ballmer stepped down as CEO of Microsoft, the firm’s value increased by billions overnight. Compare Ballmer to Tesco’s CEO David Lewis, who investors judged would make the firm millions of pounds more valuable.

A Steve Jobs can make a firm; a Steve Ballmer can break it.

CEO pay rewards extraordinary talent and skills in a highly competitive, globalized market. Good decision-making from the top might not be invaluable, but CEO pay reflects that it is as close to invaluable as one can get.

Notes to Editors:

The Adam Smith Institute is a free market, libertarian think tank based in London. It advocates classically liberal public policies to create a richer, freer world.

Sam Bowman's comments on the UK's housing crisis feature in the Daily Mirror

Deputy Director Sam Bowman's comments on the UK housing crisis feature in the Daily Mirror.

Experts say that the reason the scheme is not working is that it fuels house price rises putting home ownership out of the reach of many.

The maximum purchase price for a home under the scheme is £600,000.

Sam Bowman of the Adam Smith Institute think tank said: “The housing market is suffering from insufficient supply.”

Read the full article here.