Riches

(By Richard Holway 9.00am 12th Mar 09) Interesting to read that BT is to freeze pay for 100,000 employees (The Times). Although laudable given the collapse in earnings (and the BT share price) pay freezes are a very blunt instrument. I guess that merit increases are still allowed (which is right). In my experience pay freezes just mean that the very best staff leave (because they are the only ones who can merit higher wages) leaving you with the average and the dross. I think managers should be more selective. I’ve always favoured freezing the total payouts in divisions and leaving managers to work out who gets more – or even less!

At the extreme end of the ‘riches’ league it is interesting to note how many tech billionaires have lost that particular mantle. The Forbes Rich List (See list at BBC – Rich list hit by economic crisis) published yesterday shows 332 fewer global billionaires – now there are ‘just’ 793. The list is topped by Bill Gates but even he has ‘lost’ $18b in the last year and is now worth ‘only’ $40b. Larry Ellison at Oracle has probably done best in the last year – losing only $2.5b. It means his current worth of $22.5b puts him in 4th position. Sergey Brin & Larry Page at Google have both lost $6.5b leaving them with just $12b each.

Poor old Mark Zuckerberg has lost his billionaire status completely. But this just demonstrates the stupidity of these Rich Listings. Last year Mark’s wealth was calculated on the basis of a tiny stake that Microsoft bought in Facebook which mathematically valued them at $15b. Stupid - as even we said at the time!