What about a maximum wage?

TALKING POLITICS - BY GORDON CAMPBELL

OPINION: By writing a book about her experience at Telecom, former chief executive Theresa Gattung can now freely promote her own version of the reforms visited on her old firm by the previous Government.

Many players in the telecommunications industry regarded those reforms as being at least a decade or more overdue, but Gattung plainly feels aggrieved about how Telecom's market dominance was exposed to genuine competition.

However, even that argument has been shunted aside by her equal sense of grievance that the current chief executive, Paul Reynolds, is now getting a $7 million remuneration package to do her old job. Has Gattung been treated badly ?

In one sense, it seems ridiculous to regard anyone who was receiving over $3 million a year to do their job – not to mention her $5.4 million exit package – as a victim. After all, Gattung was free to negotiate her salary and incentive package, so can hardly blame others for the rewards that she accepted.

Back then, Gattung tended to justify her pay packet by referring to the going global rate for top chief executive talent.

Reynolds can now cite the same bizarre standard in his own defence – particularly since he inherited the leadership of a firm that was already on a downhill slope.

Instead of resenting whether Reynolds deserves to be getting twice her salary, Gattung might do well to ponder whether she truly deserved her own remuneration, given the number of challenges left in the "in" tray for Reynolds to resolve.

In short, Reynolds could argue that he is being paid more because he has to do a harder job.

Few will shed tears for Gattung. Hopefully though, she might cause many to query whether anyone really does deserve such stratospheric levels of pay – given that the costs will ultimately fall on Telecom customers in particular, and on society in general.

Is Paul Reynolds really doing one of the most valuable jobs in our society? Do we benefit, in terms of social cohesion, from having some people paid so much and others – such as the people who care for the sick and aged in rest homes, or for our children at school – so relatively little?

Routinely, society gets to debate the pros and cons of the minimum wage law.

Perhaps we should put as much time and energy into debating the merits of enacting a law about the maximum wage.

Such a wage could be set at say, 50 times the average wage. That would mean no-one in New Zealand could be paid more than a million dollars a year, surely sufficient motivation for anyone to do their job properly.

Subsequently, our bidding advantage in attracting talent on the global chief executive market would be based on the quality of our environment, natural and social.

Many overseas studies show crime and health statistics tend to be worse in countries that tolerate extremes of income inequality.

If the minimum wage provides society with a decent floor, a maximum wage would arguably do the same thing at the top, and create a ceiling that would be within sight of all of us.

Perhaps then, we would not have to endure the resentful likes of Theresa Gattung, for whom $3 million plus a year was not enough.

- The Wellingtonian