Excellent
It sounds like the people doing the Parliamentary enquiry are gaining a clue.
That could turn out to have actual real world practical results.
Will wonders never cease eh? ;)
Telco bosses' salaries must take heat for cyber attacks, says MPs' TalkTalk enquiry
A Parliamentary inquiry into the TalkTalk hack has said that telco CEOs' salaries should be garnished if their firms' cyber security practices are lacking. The report by the Culture, Media and Sport Committee, titled Cyber Security: Protection of Personal Data Online was initiated last November as “an inquiry into cyber- …
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Monday 20th June 2016 11:53 GMT Alister
Well well, you learn something every day.
I'd never heard the term garnished in it's secondary usage, I though it meant to decorate or embellish, so the first sentence confused me.
However, I now know that garnish can mean
"serve notice on (a third party) for the purpose of legally seizing money belonging to a debtor or defendant."
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Monday 20th June 2016 13:13 GMT VinceH
'The Parliamentary committee's report reflects this, recommending that “CEO compensation should be linked to effective cybersecurity” and also recommended that the Information Commissioner's Office (ICO) “should introduce a series of escalating fines, based on the lack of attention to threats and vulnerabilities which have led to previous breaches.”'
CEO compensation - no. Fines - yes.
The problem with the CEO's pay being affected (i.e. reduced - or possibly not increased next year) is that they'll be paying tax on that salary. Reduce the salary; reduce the tax - so this "punishment" is effectively a tax deductible version of a fine.
(Also, the company's bottom line is improved by the limited salary - they'll have to pay corporation tax on that, obviously, but consider the rate of corporation tax versus the rate for the tax band that Harding will be in.)
Let the CEO have their salaries, let them pay their tax dues on it. *Then* make them pay a fine out of their net income.
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Monday 20th June 2016 15:29 GMT Triggerfish
The problem with the CEO's pay being affected (i.e. reduced - or possibly not increased next year) is that they'll be paying tax on that salary.
Not if they have a good accountant.
My CEO for example pays considerably less tax than me by only paying themselves and other half 16K (taxable), the rest is in dividends that are not because they are earning less than 16.5K.
Then they come in and tell me they are poor because they only earn 16K a year for all this hard work ya da ya da.
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Monday 20th June 2016 15:50 GMT Dr. Mouse
My CEO for example pays considerably less tax than me by only paying themselves and other half 16K (taxable), the rest is in dividends that are not because they are earning less than 16.5K.
I'd say that either your CEO really is earning chump change, or you have misunderstood.
From this year, if you are paying yourself an 8K salary, only the next 8K in dividends is tax free. Even then, the dividends would first have been subject to corporation tax (at 20%). After that, you pay 7.5% inside the basic rate limit (26% including CT), 32.5% in the higher rate band (46% inc CT) and 38.1% additional rate (over 50% inc CT).
So, once corporation tax is included (which is not paid when taking salary), the tax rates are not that far off those an employee gets. Even if they are only taking a total of c. £16k each, they will still be paying an effective 10% tax (c. £1600), which is not far off what an employee will be paying (c. £1900).
He is also taking more risk than you are. If he has an unprofitable year, you will still be paid, but he will probably have to take a hit.
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Monday 20th June 2016 16:17 GMT Triggerfish
Approx 4 k in dividends a month is not chump change. It's been up to 7K a month.
From this year, if you are paying yourself an 8K salary, only the next 8K in dividends is tax free.
What about the previous years?
Also if corporation tax is being paid for by the corporation then when you get the dividend that makes it tax free for you yes?
He is also taking more risk than you are. If he has an unprofitable year, you will still be paid, but he will probably have to take a hit.
I know and thats a fair point, which I have accepted in other companies.
First small business people I know though, who spend a good portion of their day telling you how poor they are while eating out a few times a week, how much they are doing you a favour by taking such a low pay, pointing out staff are the reason they cannot afford to get baby sitters for their kids while sending them to private schools, pointing out a 60K car is not really a perk cars don't cost much to run. Saying how their house is at risk for their LTD company, while having previously told people during a pay freeze how the last projects paid off their mortagage.
Also I doubt they will ever take a hit, last time they looked short of cash they gave everyone two days to decide whether to take voluntary redundancy or not. These are the sort who will sell you down the river to make sure their own pockets are lined.
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Tuesday 21st June 2016 08:11 GMT Dr. Mouse
Fair points. I didn't realise you were talking about monthly, but this does mean he will be paying higher rate tax on the dividends. And I do know bosses who would get rid of staff before taking the hit themselves, so maybe the risks don't apply as much to him.
Your point about him not paying the CT is a bit of a falacy. The exchequer is still getting his money. If he was paying as salary, he would be paying it himself, whereas dividends the company is paying CT, him the DT. It makes not a jot of difference, the exchequer is still getting his cut.
I know this one myself. As a contractor, I pay myself using a mixture of salary and dividends. It makes little difference to me whether the company is paying tax or myself, it all comes out of the "pot". The distinction between the company paying or myself is negligible, the money is still "gone".
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Tuesday 21st June 2016 08:45 GMT Dr. Mouse
The other thing you have missed is that, even where CT has been paid, the individual still pays tax on dividends. Before this tax year, they would effectively pay nothing on dividends within the basic rate tax band, but above that (and 4K/mo is above that) he would pay.
From this year, the tax rates I mentioned above apply. So it is not that he is paying no tax, and he is effectively paying the corp. tax too.
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Tuesday 21st June 2016 11:59 GMT Anonymous Coward
Approx 4 k in dividends a month is not chump change. It's been up to 7K a month.
I agree it isnt, but it also isnt great for a CEO. I know a lot of freelance contractors who routinely take 5-7k out of their one-man-band company each month.
If he was a permanent employee on £96,000 a year (definitely NOT chump change but also not shocking for a CEO) he would be taking home £5262 a month after all his taxes were paid. Given that he has to pay shedloads more personal tax on the dividends, it might even be more cost effective for the company to pay him £96k and suck up the £12k employers NI charges.
So, while your CEO is definitely well paid, he isnt really pulling his weight amongst other CEOs. As an example, he is just into the bracket in which he can afford to buy a starter home in London.
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Monday 20th June 2016 16:37 GMT amanfromMars 1
Seconded for another area in dire straits need of improvement and revolutionary change
A Parliamentary inquiry into the TalkTalk hack has said that telco CEOs' salaries should be garnished if their firms' cyber security practices are lacking.
What an excellent idea whenever it be applied to politicians and head civil servants, to ensure and encourage Parliamentarians and public purse hogs with their snouts in the tax money trough, to lead a nation forward with rising expanding prosperity rather than paying themselves rising salaries and dodgy expenses for failing in a country doing badly and going backwards into austerity.
What's good for the goose is good for the gander, surely?
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Tuesday 21st June 2016 02:31 GMT amanfromMars 1
Get used to it, and IT [and AI] doing its own Internetworking of Things, for such is the Reality ‽ .
Cyber and Virgin Virtual Terrain Team Manufacturers don't play nice and sweet with flawed administering operating systems and/or establishments dancing to the analogue tune of old nocuous new world orders, for its IT programming projects managers are wise to the systemic weaknesses and catastrophic vulnerabilities easily exploited and expanded for fantastic corporate advantage and unbelievable personalised gain in the ware and fare, and in the Great Game that Global Operating Devices play.
Indeed, they don't really play at all with any old systems, leading as they do with everything following the news which is just doing IT and their things fundamentally better in revolutionary quantum leaping betas.
What news do you follow into a safe and secure and prosperous future? Who writes its trail and tales ?
Biting the hand that feeds IT
