Germans angry at manager rewards as boom passes them by

[jemima]

65% of Germans would be in favour of setting a maximum wage for top managers.
Does anyone know if a similar poll has been done in the UK?

From ://news.monstersandcritics.com/business/news/article_1379919.php/
Germans_angry_at_manager_rewards_as_boom_passes_them_by__News_Feature_

(http://tinyurl.com/2q7d5o)


"Germans angry at manager rewards as boom passes them by (News Feature)

Dec 10, 2007, 16:00 GMT


Berlin - The news that Porsche's chief had been awarded a large payout for the sports car maker's
financial performance would normally have been consigned to the financial pages.

But it coincided with a political discussion on setting a statutory minimum wage in the postal sector
before the former state monopoly, Deutsche Post, faces the full force of competition in its letter
delivery services next year.

The roughly 60 million euros (90 million dollars) that Porsche President Wendelin Wiedeking took
home last year contrasted sharply with the 9.00 euros an hour a postal worker might get if the
measure is passed.

With overtime, that would take a postman or woman to a little more than 20,000 euros a year - barely
enough to live on and not nearly enough to support a family. Workers in Deutsche Post's competitors
currently get nowhere near even that.

Chancellor Angela Merkel had Wiedeking in mind when she lashed out at her Christian Democratic
Union (CDU) party congress in early December at 'payouts in the realms of fantasy.'

German managers might like to compare themselves to their counterparts in the United States, but
in Japan top car managers earn not thousands of times what workers do, but just 20 times the rate
of a skilled factory worker, Merkel said.

To add insult to injury, Deutsche Post Chief Executive Klaus Zumwinkel chose his moment to sell share
options, cashing in a profit of around 2 million euros as the company's share rose after it became clear
a postal sector minimum wage was on the cards.

Merkel and her party reject legislation to solve the problem of excessive management payouts.

But the chancellor was pleased at the 'intense public debate' and hoped it would lead to those in
responsible positions to 'reflect,' her spokesman Thomas Steg said.

The anger is deeply felt. A new survey by the Allensbach Institute found the vast majority of
Germans believed the are not benefiting from the country's economic revival.

Just 15 per cent thought the benefits were being justly distributed, a historic low, compared with
26 per cent as recently as last year, the conservative institute found.

That belief is fully justified, according to official government figures, which showed that household
disposable income had actually declined by 0.4 per cent during the height of the boom, from the
third quarter of 2005 to the same quarter this year.

Changes to the tax regime were given as the main reason.

Figures prepared by the WSI economic research institute, which is linked to the still-powerful trade
union movement, showed that worker buying power had declined for the past three years running.

Contrasting this with manager rewards, German Confederation of Trade Unions (DGB) spokesman
Axel Brower-Rabinowitsch noted that 'some managers are cashing in millions for failure while the
upswing passes other workers by.'

'These excrescences undermine social cohesion within companies and in society at large,' he added.

That was theme taken up by German President Horst Koehler in November, when he called for a
'culture of moderation' in an interview with the business daily Handelsblatt.

'Business leaders have got to grasp that their actions have an effect on social cohesion,' he said.

Some top managers are themselves concerned at the uproar. Siemens Chief Executive Peter
Loescher has come out firmly against fees for joining a company or for golden handshakes.

'Managers should not lose touch with reality,' he told the Monday edition of the daily Sueddeutsche Zeitung.

The Social Democrats, the junior partners in Merkel's broad coalition, simultaneously announced they
were setting up a working group to look into the possibility of legislation, despite possible constitutional hurdles.

But others have told the politicians to mind their own business.

German Chambers of Commerce and Industry (DIHK) President Ludwig Georg Braun called the debate 'absurd.'

Listed companies had long had to be more open about management pay structures, and precisely this
transparency had led to the current uproar, he said.

'This is not a playground for politicians,' Braun said.

Wiedeking's payout may have been substantial by anyone's calculations, but it was far from unusual.

Deutsche Bank Chief Executive Josef Ackermann took home 9.5 million euros last year in pay alone,
not counting options and other bonuses.

And the salaries of the heads of other top companies in the leading DAX 30 index were also all in the millions.

The largest economic research institute, the DIW, called the debate 'populist.'

'There are footballers and popstars who earn similar amounts, sometimes for substantially less
achievement,' DIW President Klaus Zimmermann said.

Many newspaper commentators took a similar line, calling instead for supervisory boards and
shareholders to curb manager excess.

But the majority of Germans want action. A TNS-Emnid survey published over the weekend found
65 per cent in favour of setting a maximum salary.

© 2007 dpa - Deutsche Presse-Agentur"