Wednesday 1 November 2006

Shot in the foot

Articles like this one are really annoying:
SCOTLAND must attract more "companies of scale" and get more listed firms on the London Stock Exchange or risk the gap between salaries here and the rest of the country continuing to rise.

That was the stark warning issued yesterday by the Institute of Directors (IoD) in Scotland after new figures revealed that Scottish executive directors are paid around £61,650 per annum, compared with the UK average of £69,629, or about 12 per cent less.

I don't believe those figures for a moment. The last time I checked there were some 1.5 million companies in Britain and that would probably give us around 130,000 here in Scotland. Each one will have at least one director. The typical Scottish company is not the Royal Bank or Scottish & Newcastle, it's your local greengrocer or taxi company. I fully agree with the IoD in rejecting criticism of those who do earn over £60K per year but it does the business world no good at all when others are led to believe that the typical director is getting that sort of money.

Now it may be that I'm missing something here. If by "average" the IoD is using the mean, the results could be skewed by a few massively paid people at the top. After all, if Bill Gates, Warren Buffett and John (moron of the week) Kerry moved to Scotland, we'd get a pretty big "average". Better to use the median for this kind of survey. By the way, is it really such a bad deal for Scottish directors (however defined) to be earning around 18% less than those in London when we bear in mind the difference in living costs?

1 comment:

David Farrer said...

Comment made on previous template:

"companies of scale" is such a ridiculous, politically correct term. what they mean is 'big companies', but they're afraid to say it. reminds me of "people of colour".

1 November 2006, 21:50:25 GMT