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Introduction

I admit it, I am addicted to the world of big numbers reward porn. The earnings of Jeremy Clarkson, investment bankers and FTSE  CEO’s have always been a fascination to me. I ponder over HMRC statistics of high earners and the expected value of executive share options. It is like standing outside the Rolls Royce showroom hoping that some of the glamour and wealth might rub off on me.

Quality vs Quantity

Even as I salivate over the big numbers I know that the “reality” of reward is found in more mundane places. Average earnings in the UK are around £35,000 and due to the skewed nature of the earnings distribution, about 62% of wage earners are paid less than this average amount. Thus the vast majority of us (if we are fortunate enough to be in work) are earning less than £25,000.

I have operated in the world of those earning more than £150,000 – roughly the top 1% of wage earners in the UK. It is the world of executive management and investment bankers (I spent seven years working as a Head of Reward in an investment bank).  The numbers of people are much smaller; but the reward work is, perhaps, more challenging and more engaging for some. It is also numerically more complex with GAAP reporting, Black Scholes calculations and Monte Carlo simulations of expected value.

My interest in reward porn is shared by a large number of journalists and commentators. Not to mention a fair swathe of the less intelligent politicians: perhaps a degree of pay envy? They seem to share my addiction to big salaries and larger bonus payments. The chattering classes and the inhabitants of the Westminster village seek to comment and analyse the murky world of big number reward porn; often without seeking or wanting to understand the many niches and dark corners that populate the genre.

There are a smaller number of commentators and academics who are interested in the other end of the spectrum. Issues of low pay and relative poverty do not engage the reward porn gene in quite the same way. Although, the fact is that low pay and relative poverty is a far bigger and pressing issue than the top 1% – even if they do pay two thirds of the payroll taxes in the UK. It is just not so sexy for our politicians and most journalists.

Reward’s everyday work

Much of our work is undertaken in the space between the extremes of high and low pay. We spend time inventing new sales incentives or remarketing the employee benefits for a global IT company. The good solid work of a journeyman or a master  of the dark reward arts.

I have spent the better part of twenty years working on both the workaday activities of pay rounds, risk benefits and pensions as well as behind the erotic deli counter of executive reward. It is a interesting and fulfilling niche of the HR world full of challenge and not a little bit of advanced maths.

Conclusion

I love all aspects of reward, but still have a passion for the reward porn of high numbers; big salaries, exotic benefit packages and larger bonus payments. The world of LTIPS, executive share options and bonus metrics is still a favoured place to visit. I day dream of a well formed short term incentive plan with deferral in to equity and a juicy bit of claw back when I think no one is watching. Well, we all have our vices.

About Ian Davidson