The Guardian view on shameless CEOs: because they’re worth it?
Almost 50 years ago, the American philosopher John Rawls published a celebrated account of what fairness looks like in a liberal democracy. Though scrupulous in its safeguarding of individual freedoms, Rawls’s groundbreaking A Theory of Justice incorporated an important rider. His so-called “difference principle” stipulated that resulting inequalities were justified only if they benefited the least well-off in society.
It is doubtful that Rawls would have judged the pay of Tim Steiner, the chief executive of Ocado, to fall into this category. A report by the High Pay Centre thinktank has revealed that Mr Steiner last year earned £58.7m. This astonishing rate of remuneration is 2,605 times the average wage of one of his employees, which stands at £22,500. Put another way, 24 hours of Mr Steiner’s time is allegedly worth about 10 years of toil from an average Ocado worker.
The Covid pandemic has, of course, been a boom time for digital businesses. An online grocery delivery company, Ocado has profited hugely from an accelerated shift to internet shopping. This came on top of years of steady growth. No doubt, Mr Steiner’s talents and judgment have played a part in this success story. It is, however, equally certain that he has simply ridden the good fortune of having a top job in the right sector at the right time. In a fair society, no slice of luck should ever be worth this much.
The High Pay Centre’s analysis reveals that the biggest pay gaps in the British economy are found in retail, where the CEO/employee ratio is 140:1. But the figures reflect more broadly an explosion in executive pay over recent decades. In the UK’s 100 biggest stock market-listed companies, chief executives pocket 73 times the amount paid to workers on average. Forty years ago, the ratio was 18:1. Since the financial crash, this shameless self-enrichment by the wealthiest in society has taken place as average wages have stagnated and, in many cases, fallen in real terms.
Most recently, of course, Covid-19 has tipped millions into economic crisis. The details of Mr Steiner’s pay were disclosed on the same day that it emerged that 800,000 people have lost their jobs as a result of the pandemic. As the working poor resort to food banks in ever larger numbers, Unicef has launched an emergency response in Britain for the first time. The UN aid agency will channel over £700,000 to food insecure households across the country.
This gulf between the top and bottom of our society is not inevitable. It is immoral. Last spring, it was generally recognised that delivery drivers, along with care workers, supermarket staff and refuse collectors, were crucial to the nation’s wellbeing, but poorly paid. The public mood – expressed in those Thursday night rounds of applause – suggested there was a desire that something should eventually be done about this.
It is therefore depressing, at this year’s end, to note that while Ocado van drivers were merely earning plaudits, their CEO was sitting on the more tangible reward of £58.7m. The notion of regulating the pay ratio between chief executives and employees has been mooted in the past. If a better, more cohesive Britain is to emerge post-Covid, it urgently needs to be revisited.
This article was amended on 17 December 2020. A previous version said that Ocado’s chief executive, Tim Steiner, was paid as much as the average Ocado worker’s yearly salary for just one day. In fact he is paid about 10 times as much as an average salary in one day.
