Free Open Dissent by Mike Soden Page A

not be inconsistent with the cuts and increased taxes that are being experienced by us all. The Government can no longer go to the international markets to borrow what is required to fill the deficit unless they are seen to be making inroads into reducing this deficit. It may take one or two generations to get back to where we were at the peak of the boom. We have an obligation to pass on to the next generation a country in better shape than that which we inherited. I imagine that, despite our efforts, whatever we pass on to the up-and-coming generation of young adults may not meet their expectations.
    During a period when every level of authority would appear to have let society down, those who provide a strong ethical and moral backbone through the public service are facing losses that they were not prepared for. The natural reaction to reject government proposals in various parts of the public sector could easily be mistaken for petulance when in fact it was a reaction to brute force and ignorance in the communication process. The reaction of offended parties will always be more favourable if theyare dealt with openly and honestly. What this might lead to in the public service is a prolonged disruption to services which might well have been avoided by clearer dialogue. The void that has appeared in the management of the public sector is easily filled by unions who wish to take care of their people. Whoever is paying the wages and salaries of this sector should be strong enough to exercise their responsibility as managers of their staff. No one wishes to take a step backwards in compensation, particularly if you have not contributed to the downturn; however, it is simply unfair that benchmarking is a one-directional mechanism that does not adjust to negative growth in the economy.
    Compelling reading and viewing it may be, but as the dirty laundry of the elite bankers and developers in Ireland is hung out to dry in public, the question arises as to whether the excesses of these executives are excesses in the context of the industry or only in the eyes of the public. How do people, intelligent directors, arrive at the conclusion as to how executives are to be compensated for their work? The dimensions of the executive jobs are easily measured and can be compared to similar jobs in similar markets. For bankers at a certain level, it is inevitably one of the great joys to read the headlines in the newspapers announcing increased profits, and increases in earnings per share and in dividends, and to hear forecasts on future expansion and growth, perhaps in the form of international acquisitions. The skills and experience required to deliver future growth are recognised in the form of salaries,bonuses, stock options, pension contributions and so on. Like the rich list, there is a list of highest-paid corporate officers and, on examination, nothing seems extraordinary. At least not if you happen to be on the list.
    In countries that seek social fairness the highest salary is considered in terms of being a multiple of the lowest or average wage. This multiple varies from industry to industry and country to country. In Holland, the salary received by the highest paid executive is four times the average wage, the lowest multiplier in Europe. This multiplier can be in the hundreds in different sectors and countries. These differences between average and top earnings can be explained by executives who believe that the payments they receive are consistent with the value brought by them to their shareholders. In my view, executives get rewarded for creating returns on the capital provided by shareholders, whether this is based on a riskfree or a highly speculative strategy.
    Most shareholders in Ireland have holdings either directly or indirectly in the banks. Over the years, no matter what the performance of the institution was, it was difficult for many of these small shareholders to understand how anyone could be worth the enormous