Friday, February 22, 2013

Busting the myth of the "global talent pool"

With the heat going on Solid Energy's excessive management salaries and bonuses, we're probably due for another round of whining from the rich. "If you pay peanuts, you'll get monkeys," they'll say. "It's a global talent pool and you have to compete".

It's a self-interested myth. And the High Pay Centre has the numbers to prove it.

The HPC examined the career histories of the CEOs of current Fortune 500 companies. They found that contrary to the claims of business executives, there is no global talent pool:

  • Only 4 chief executives out of 489 were poached while CEOs of another company in a foreign country – just 0.8% of total appointments
  • Only one CEO was poached while CEO of another company in another continent
  • In North America, Japan, Latin America and Eastern Europe not one CEO was appointed from outside the country where the company is based
  • 80% of CEO appointments in the world’s largest companies are internal promotions
  • Just 6.5% (32) of current CEOs were poached from another company while serving as a CEO.
Myth... busted. So, those inflated salaries the business elite pay themselves are based on a self-serving myth which simply isn't backed by the facts. Sadly, this is unlikely to make them stop. But it should at least make our public sector and state-owned companies stop wasting public money on such ridiculous greed. (The full report is here [PDF])