Ken McMeikan, Greggs chief executive, has claimed that the company’s profts have aided job creation.
Appearing on BBC2’s Newsnight last Thursday (23 February), McMeikan explained that 10% of the business’ profits are shared among staff. In addition, the high street bakery firm confirmed it paid its staff above the minimum wage for a number of years.
McMeikan said: “There is something about that when your employees feel that they are benefiting in the success of the company, and it’s proportionate, that everyone is sharing in that success. We have worked very hard over of years to keep above the minimum wage, plus if you take over the last three or four years we have made sure we have had a wage increase every year and this year we will have another 2.7% pay increase.”
McMeikan further discussed issues surrounding big pay packets and bonuses featuring in the headlines with Mars Inc’s managing director Fiona Dawson, Wates Construction’s chief executive Paul Dreschler and Mark Price, managing director of Waitrose and the Business in the Community’s (BITC) chairman.
McMeikan added: “The profits are hugely important if companies are going to invest and continue to grow, and by growing, what you then do is create jobs. If there is one thing we have as a big challenge as a country, it is that we need to create jobs, because there are so many people out of work, so that is how we can get a feelgood factor back into the UK.
“But unless we have companies that are growing profitably and are investing those profits back into growing and creating more jobs, then we get into a vicious downwards spiral.”
The debate featured news that UK Uncut had discovered that some businesses are not paying the full corporation tax.
McMeikan added: “What people look at is if they are paying their taxes, then why are big companies not being seen to be paying their taxes. If a company is not being seen as paying its due tax, then it should be held to account. You have to have a balance – if you blow it up and say those fewer companies are systematic of what’s happening in all business, then all business gets cast in the same way.
“There is a danger for British business as a whole when the media holds up one or two examples and says, ‘That is business’.”
Speaking of whether he thought there was an issue in terms of the gap between the lowest- and highest-paid people, McMeikan commented: “It think it does matter, particularly to the people who work for you in your company. They will look to see who is earning the most and whether they deserve it. I think there is a credibility issue for you as a leader with your own people.”
The Greggs boss told Newsnight presenter Kirsty Wark that the gap between the company’s lowest and highest paid employees is 50 times more than the average salary, in comparison to the John Lewis Group, which owns the Waitrose supermarket chain, which has a gap of up to 75 times more.
The programme also featured Prime Minister David Cameron making a speech at a BITC event in North London yesterday, celebrating 30 years of business in the local community. He said: “Frankly I am sick of all this anti-business snobbery. Business is not just about making money as vital as it is, but it is the most powerful source for social progress that the world has ever known.”
The event was attended by HRH Prince Charles of Wales and a number of UK business bosses.
To view the full episode, click here.