This market has everything to malfunction

Poor patterns! Unable to live in peace with their stories of money again in the spotlight. Exercised stock just before a collapse stock market to EADS, exceptional in Vinci, retirement-Hat-more like a top hat to a beret, premiums parachutes Golden... Policies fall them above shortcuts arm. The UMP President Nicolas Sarkozy spoke "of consumerism". His counterpart of the PS, François Hollande, blithely confesses: "I don't like the rich, I agree. For the dumbfounded French, it is as if the head of the French companies were paid more and more expensive to pay the arms and legs less and less. We do not falsely virtuous: money is indeed one of the engines of human action. "When you give peanuts you monkeys". To have good leaders, better worth to pay for them. Only this is: when millions accumulate, it becomes essential to legitimize them. Especially on a topic also symbolic that the money of the patterns, especially in a country that likes little companies and who always entangled in the stories of big money. The response is to drag the mob football players on fortunes to mark three goals every eight years, or ultra-rich singers despite their raucous voice, is not enough!

The problem is that the economy and morality are often tangled in this debate. But it's two radically different registers. Therefore, approach them separately. First question: can the economy justify very high wages Yes... in theory. If a business leader put the market value of the company from 10 to 20 billion euros over three years while another would stagnate, it makes sense that the shareholders the highly reward for this performance. In practice, it is infinitely more complicated. If it is possible to assess whether a company is better than its competitors, how to distinguish the role of the boss of one of its teams How to make sure that it has prepared the future How to adjust its compensation with long-term shareholder interests Armies of consultants are their fatty cabbage of these issues, evidence that there is no evidence in this matter. Patterns in the press charts often distinguished leaders subsequently dedicated to the same.

Many patterns sweep these objections of a clincher: "it is the market sets prices." A market become international, as shown in the presence of French at the head of foreign firms, such as Jean-Pierre Garnier to GlaxoSmithKline, or Patrick Cescau at Unilever, where an effect of aspiration wages upward. But the scale of parrot is a fragile argument. Because there is much a supply and demand, "market leaders" is a catalog of anomalies. There are no atomicity of supply and demand (the number of companies is limited, the number of potential patterns also). There is no homogeneity of the CEO. The information is neither transparent nor symmetric. This market has everything to malfunction.

Shareholders are also increasingly looking on the subject. In some companies, they leave a significant share of revenues that should return them in the pocket of the leaders. Hence sometimes laborious creation of remuneration committees. Hence also the Breton Act which allows shareholders to vote in the General Assembly the outstanding elements of executive compensation. Nothing more normal, because the mode and the level of pay of leaders influence the performance of the company. In the United States, it is for this reason that the pension fund Calpers (a million members, more than 200 billion dollars in portfolio) is very active on the remuneration collected by the leaders of the firms where it invests. Remuneration of managers, the power of shareholders is only embryonic! Paradoxically, the market works better for the stars of sport or entertainment, and ready to challenge less. When golfer Tiger Wood participates in a competition, the TV audience increases by half. Johnny meets a stage alone. No pattern can be said as much! Even footballers opaque market is more open than that of the patterns. If there is a major economic justification for the mégasalaires of the patterns, it must be constantly supported.

This economic fragility gives even more of acuity to the second question: are these very high salaries morally acceptable, especially in view of the inequalities that they generate Some principles to obtain a broad consent, without always be respected. There must be transparency (hence laws NRE and Breton). The remuneration must not be determined by the relevant leader or people that depend on. A large income is the counterpart of a large risk (this is why the financial guarantees required by Jean-Marie Messier after his eviction of Vivendi were shocking). Beyond, the answer varies from one country to another, or even from one individual to another. Therefore required to bear these legal requirements In his presidential project, the PS suggests that it is the domain of the State ("we encadrerons the evolution and the mode of the remuneration of managers"). Yet, it would be strange to see intervene directly in the wage policy of firms. In the matter, its legitimate field of action is the binding of the rules of governance and taxation (income, heritage, inheritance). It is to not deprive.

Shareholders, for their part, have their say on the moral dimension of the remuneration of managers. First because it is their right to owners. Then, because the image of the company, and therefore its value depends on. Because, in the end, it is the client is King, and therefore best placed to express a moral point of view on this issue. So far, it has hardly done. But choqueront more pay, more consumers will act accordingly. Tomorrow, some consumer websites may take this kind of language: "you hesitate between Pepsi and Coca." Last year, the pattern of the first hit on your back and the second $ 13.8 million 5.8 million. You still hesitate "Customers are already sensitive to this issue. In a letter to the directors of Vinci, the Director-General of the construction group wrote about the lavish mansion for leaders that it is "so ostentatious luxury that da Vinci executives were reluctant to receive their customers". The hotel will be sold. There are the ballast in the wage flask of CEOs.