James Moore: Bumper boardroom pay is bad for business
Thursday 23 December 2010
Outlook Not all customers are the same, of course. There are customers and there are valued customers. Most corporate executives sit in the latter category. In fact, they're not just valued customers, they are super duper don't lose this guy or you'll lose your job customers. It's because they earn such spectacular amounts of money.
This is one reason why customer service is so abysmally bad in this country. Executives live in a cosseted and slightly unreal world, surrounded by yes men and flunkies who cater for their every need. Many of them pay attention to service standards – particularly those that work in competitive industries where being shoddy loses you sales and profits. But, unless they agree to go on something like Channel 4's Undercover Boss they have little comprehension of what it's like to experience the frustration of their customers.
I remember a conversation with Helen Weir, the head of retail banking at Lloyds, after a results presentation this year. She was waxing lyrical about how Lloyds loves its customers. As evidence she pointed to figures which show that Lloyds is much better at selling multiple products to its customers than rivals. She was briefly rendered speechless when two journalists launched into diatribes which ought to have rapidly disabused her of any fond notion that Lloyds is any good. It's not.
But when you're Helen Weir, or someone like Helen Weir, you probably bank with a private bank where they have batteries of people dedicated to retaining your business. And you fly first-class. And you have the expensive premium service for everything else.
There's a good reason why people think executive pay is far, far too high, and its not the politics of envy, as the business lobby would have you believe. It is because it can very easily make businesses bad. And that's bad for business.
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