I mentioned a short while ago in an article featured on this website and elsewhere that the remuneration ratio between a mid level executive like me in Shell when I was last employed by the oil giant seven or so years ago was 10:1. The top man in Shell was paid ten times what I as a middle ranking employee was paid. I never had a problem with this. Today that ratio has risen to an astonishing 50:1 the greedy Executive Board of Royal Dutch Shell pay themselves rewards that bare no comparison with what their predecessors of less than ten years ago were paid. Obscene? Of course. And a root cause of Shells current dysfunctionality and troubles as well the evidence would suggest so.
In a fascinating new book, The Spirit Level, Richard Wilkinson and Kate Pickett show that more unequal societies are socially dysfunctional across the board. So in a corporation like Shell as the head honchos pay themselves more and more the rest of the staff, in the more humble pay grades, become disenchanted. Take Shell Canada for example. Friends of mine in this once fine company were aggrieved when their opportunist CEO, the British Clive Mather, helped himself to a cool $10Canadian million in stock option rewards during his fairly brief tenure in Calgary. Nothing illegal Im sure about Mathers self- rewarding term – but a fair balance of risk and reward? Of course not. And the fact that the remuneration system of one of the worlds largest corporations permitted (maybe even encouraged) this excess was scandalous. So Canadian employees who had forgotten more about what was necessary to make Shell in Canada a successful business than Mather would ever be able to learn watched as he scooped up the lottery and ran.