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Compulsory reading for high school students and their parents should be salary surveys published by management consultancies such as P-E Corporate services. Students in graduate schools no doubt read such surveys as a matter of course as they set out to join the ranks of the rich and avoid the masses of poor.
Parents sometimes pass on to their children the myth that real wealth comes from owning a business and not from working for others. Remuneration reviews reveal the fallacy of this by publishing facts on the incentive schemes worked out by the remuneration committees of publicly owned companies.
A man who may have started off a fast food outlet and then sold it to the public may earn share options which he sells every month so becoming wealthy, irrespective of whether the fast foods continue to do well. Had he remained a small business owner he would have remained conscious of how little can be earned in eight hours out of twenty-four and of how little some fast food kitchen staff can be paid.
In 2008 the economies of the Western world were brought to their knees when banks ran out of money to lend. The monthly earnings from pension contributions, insurance premiums and interest payments became insufficient to fund the salaries and risks incurred by the bankers. Despite this governments bailed out the banks and hefty remunerations remained. Apparently the remuneration packages are an inherent aspect of the banks' profits schemes. Bankers are paid to take risks with the money of other people and paid a bonus when profits are shown through trading in one form or another. Running an own business is not as lucrative as trading within the comfort zone of a large bank, which may even receive government back up if risks turn sour.
Salaries per se quickly become irrelevant among the higher echelons of high earners. Remuneration committees turn then to incentive bonuses or 'retention' schemes, ostensibly designed to retain the services those who are said to be indispensable, though they may of course die or resign at any point. Such schemes provide for the allocation of share options funded by the shareholders of the companies. Such options may be resold, often at massive profits, or retained if the company shares increase in value. So the richest people in the Western world become more wealthy by the day whilst drawing relatively modest monthly salaries.
The number of people earning very high salaries and incentives will always remain small relative to the vast number of people who survive on a few dollars a day. It is public money that funds public companies and the amounts that can be collected from interest on mortgages, insurance premiums and monthly pension payments is finite. Some cynics believe that in Africa one has to have the proper skin color or tribal affiliations in order to win a lucrative place on the board of a public company.
Perusal of salary surveys will throw light on the issue. Whatever the case it remains true that even in the cases where board places have been earned by hard work and commitment rewards are sometimes beyond all measures. The only way in which an executive bankers earning of millions in a month can be explained is through the concept of fiduciary duty. This means that people who handle the money of other people do have concrete obligations and responsibilities.
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