http://bit.ly/pJ4Wvk National Small Business Week Day 1

The U.S. Small Business Administration's National Small Business Week was held in Washington, D.C., marking the 56th anniversary of the agency, and the 46th annual proclamation of National Small Business Week.

More than 100 small business owners from across the country gathered at the Mandarin Oriental Hotel along with keynotes and panels fro leading speakers including Karen Mills,Administrator , U.S. Small Business Administration and Michael Porter
Bishop William Lawrence University Professor,based at Harvard Business School

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Vince Cable is just the latest figure to try to slay the dragon of rampant executive pay. In the past two decades, there have been a raft of initiatives on boardroom governance and pay, led by worthies, including Sir Adrian Cadbury, Sir Richard Greenbury, the late Sir Derek Higgs and Sir David Walker, who looked at bank bonuses. Yet despite the earnest efforts of these City knights, executive pay has spiralled to ever-more vertiginous heights in defiance of the ordinary rules of economics, let alone gravity.



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Divide: The gulf between executive pay and the average worker has widened

Cable’s proposals include improving
disclosure on pay, possibly by forcing firms to publish the total
figure, including salary, bonuses, share schemes and pensions.
He also suggests giving shareholders
the right to vote down directors’ pay packages and having employee
representatives on company pay committees, which would delight the
unions.
Cable said: ‘There is a great sense of
grievance that workers and pensioners are paying the penalty for a
crisis they did not create. I want a real sense of solidarity, which
means a narrowing of inequalities. And the wealthy must pay their
share.’
But the crusading LibDem minister will have his work cut out if he is to succeed where so many have failed.
 



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Bosses’ pay at FTSE 100 companies has
continued to rise regardless of the state of the  company, the stock
market or the economy.
A report published this month by
consultants Manifest and MM&K found that the average FTSE 100
director saw his or her pay increase by 12 per cent over the past year
to £4.37m, with some earning far, far more – in the midst of the worst
economic and financial crisis since the 1930s.
Over the past dozen years, the total
pay of chief executives in the elite blue-chip index has risen by 323
per cent, or 13 per cent a year, a level of increase that is utterly
disconnected from the experience of ordinary workers.
They  saw their average earnings go up
by just 4 per cent a year – or 1.5 per cent taking into account
inflation over the period.  Back in 1999, the average FTSE boss earned
47 times as much as the average full-time employee; now that figure is
88 times (see graphic above).
This growing gulf represents a
redrawing of old social distinctions – exemplified by the famous comic
sketch where John Cleese, who claims to be upper class,  says he looks
down on Ronnie Barker, who is middle class, who in turn looks down on
the working class Ronnie Corbett. It puts corporate chieftains along
with investment bankers and oligarchs, into a super-class.
Perhaps more mystifying than the
disconnection from ordinary workers is the fact that executive excess is
also divorced from the rewards, or rather lack of them, received by
investors, since the  FTSE 100 share index has shown no growth whatever.

Deborah Hargreaves, chairman of the
High Pay Commission, says: ‘Performance-related pay does not work at
all. It is an absolute myth that high rewards result in better company
performance.’
She adds: ‘We desperately need a shake-up and Cable is asking the right questions.
The problem is that corporate governance guidelines only go so far, as companies can just decide to flout them.’
Critics point out that shareholders
already have the power to remove directors and vote against share option
schemes, but for whatever reason choose not to, although they have a
clear interest in clamping down on executive excess at the companies
where they invest on our behalf.
One major problem for Cable is that
investors are a diverse bunch, often with only a small stake. It means
they cannot impose views without acting collectively – something they
seem reluctant to do.
Investors’ level of knowledge of
individual companies, and the competition they face for top talent, also
varies widely; not all shareholders are equipped with the expertise to
decide how much a chief executive deserves.  And Cable’s assault is only
on listed companies, leaving private equity and other unquoted
businesses to carry on as they please.
An end to high, undeserved rewards is
long overdue – but if he relies on supine shareholders, the chances are
that Cable’s attempt will go the same way as those of his predecessors.