Executive remuneration is up, shareholder returns are abysmal and productivity has stalled. There is something wrong with that productivity picture!

by Marco Tapia

in management-it-consulting,

October 6, 2011

A great article was produced in the AFR on 1/10/11 about executive remuneration and productivity, better say, the discrepancy on how the increase of executive remuneration is reflected in a decline in productivity!!!

Andrew Cornell explains in his article how executive remuneration has been increasing whilst shareholders returns and productivity has been in decline.

He says, “The past decade has seen productivity stall, total shareholder returns flatten, wage share of output decline but total executive remuneration balloon. There is something wrong with that productivity picture!. “

I encourage the reading of this great and well prepared article.

Some important quotes in the article:

“Everything comes back to productivity. It always does.”

Glenn Stevens, Reserve Bank of Australia (AFR 1/10/2011)

“We expect growth in living standards to slow over time unless productivity growth improves”

Martin Parkinson, Secretary to the Treasury (AFR 1/10/2011)

Additionally, let’s not forget:

“Productivity isn’t everything, but in the long run it’s nearly everything”

Nobel Prize-winning economist Paul Krugman.

Marco Tapia

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