Board compensations and the media industry: Where have the ethics gone?

TitleBoard compensations and the media industry: Where have the ethics gone?
Publication TypeConference Paper
Author(s)Almirón, N.
Affiliation (1st Author)Deparment of Communication, Pompeu Fabra University
Section or WGPolitical Economy Section
DateWed 26 June
Slot CodePEW3a
Slot Code (Keyword)PEW3a
Time of Session14:00-15:30
RoomQG21
Session TitleCritical issues in Global Capitalism
Submission ID4867
Abstract

Context In 2011 the board of directors of Grupo Prisa, the first Spanish media conglomerate and the 10th largest listed media group by revenues in Europe, announced a lay-off of some 18 per cent of its staff, or around 2,500 people, in a dramatic restructuring scheme. That same year, Prisa declared a loss of 451 million euros. Since then Prisa has carried out several rounds of job cuts in all their major brands (including the daily El País , Prisa’s flagship). At the beginning of 2012 it was disclosed that, in spite of the above, Prisa’s CEO had received 13.6 billion euros as 2011 annual compensation, making him the second most well paid CEO in Spain. Actually, the remuneration of the whole board of executives in Prisa amounted to 20.6 billion Euros in 2011. It was by far the highest paid board in Europe that year in the media sector, but exorbitant salary figures are not an attribute of Prisa. The truth is that media industry boards have become some of the most well paid places in the world in the last few decades. Main argument Some media companies with the best paid boards lost billions of euros in 2011, but even with billions of profits it seems reasonable to state that such high salaries are counter-productive, unfair and unethical in democracy. They are counter-productive, unfair and immoral for companies in any economic sector, but they are particularly undesirable in the information and communication sector, clearly one of the pillars of any good society if equality, trust and empathic values, i.e. common good values, must  be emphasized. Research goals The literature on corporate governance in the media has dealt profusely with the topic of boards and CEO compensations. In fact, the number of papers focused on management compensation has risen over the last two decades, in line with the increase in the amount of executives’ pay. The relationship between compensation and performance has been one of the most studied issues, but in most cases economical approaches have been dominant. That is, most researchers in the media economics field are actually justifying high rewards as long as there is a high level of performance (profitability and market capitalization mainly). I do not reject the value of this research, on the contrary, but I suggest adding to this view the critical political economy perspective. What I will introduce in my paper is: Up-to-date data on board remunerations in the international media industry.A review of potential responses to this moral challenge from the political economy of communication.A review of actual responses to this moral challenge from the political economy view of current common good promoters in Europe.

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