By Cory Doctorow at 1:41 am Wed, Oct 7, 2009
Top 8 of 2008 CEO Compensation
Just terrific. What can you do with 133 million dollars? What cannot do?
…Is a person with such money any longer human?
Clearly the companies involve should can their CEOs and hire thousands of minimum-wage workers. It’s do wonders for the corporate direction, and the floors would be spotless.
Everyone’s not equally valuable…
Sure, Cicada, we’re not equally valuable. Nobody argues that.
But are some people almost nine thousand times more valuable than others?
And that’s just minimum wage earners in the US we’re talking about. How about the majority of the world’s population that suffers under suffocating poverty?
I’m not even sure what your snide little remark is even supposed to be in favor of.
@jtegnell- It’s in favor of butting out of what is a matter between the corporation paying the money and the CEO receiving it. Their money, so what they do with it is (literally) their business– if they want to be philanthropists with it, they will. If they want to pay the CEO a mint they will, and it is and should be their right to do so.
No one has an innate obligation of any sort to those suffering under suffocating poverty. (Or to those making a few million a year). You are not your brother’s keeper.
So how many are *you* worth Cicada?
Not that anyone can live on minimum wage anyway.
Also, these guys are arguably the least of it, since by taking their pay as salary they actually pay taxes on it. Does anyone really think Steve Jobs makes $1 a year?
Oh, I’m sorry.
I forgot I didn’t have the right to register my disapproval.
@jtegnell- Cliche, sir.
Now come on– if we were to throw up your income to public scrutiny, examine it in light of, say, the average in Burkina Faso, and tut about whether you needed less would you not be inclined to say that the concept was silly, intrusive, and (assuming any conception of private property) vile?
In the great game of “Get some Dough”, these people have succeeded brilliantly. Amazingly. And they don’t owe you (or anyone but the people paying them) a blessed thing because of it.
If markets were truly free and not run by corporate welfare, cartels and oligopolies then you would be absolutely correct. As it is, customers are often unable to vote with their checkbook and are forced to pay for excesses at the top. Since they are ultimately paying, they are owed a great deal, even by your logic.
im sorry but these people have built their status on a lie. They convince the world they have magic powers when in reality they are just steering a supertanker powered by their workers.
Ooh, lookie here, a graph that uses proportional-height creatures to indicate excess, just like in ‘How to Lie with Statistics’ (1954). Why is this dishonest? Because you instinctively compare area (or even interpolate and compare volumes), making the comparison seem much more odious than it actually is. The CEO on the right is earning three times as much as the CEO on the left, and indeed a very large amount of money (though far less than the owners of these businesses, you understand). But that’s not the impression you take away because of the dishonest presentation.
actually, i get the impression that they all make too much money. i’d have gotten the same impression from a boring pie chart. i fail to see the problem in the graphic.
I think it’s a rather mild infographic. Now if the CEOs were standing on a pyramid of little men each representing 100 workers, it would be more effective.
A pyramid of men representing one man each the size of the CEO would be the most accurate representation, but then you’d have to squint to see the fat bastard on top.
@Cicada, I agree with you completely. People are really turning into such little whiners. I think it all began at Nuremburg – the Allies were just envious of how well the NAZIs had played the “kill as many people as you can” game. I mean, we should have never even gotten into that war. We are not our brothers’ keepers. The main thing is to win and evolution and nature back this up. These days that means those of us who are successful routing the planet’s resources into fulfilling our every desire. Screw global warming, poverty, warfare (hey – war is really profitable actually) and all this other liberal BS. Viagra and first class tickets to the Dominican Republic with Rush Limbaugh – that’s a good time!
And world leaders who make much, much, much less than this, and other politiciansâ€”they wouldn’t ever end up beholden to business or business leaders, natch.
IMHO it would be more interesting to compare CEO pay with the median pay for that company than minimum wage.
Nabors bought the tax loophole that allowed it to move offshore and not pay taxes. So you the American tax payer are surely paying for that compensation.
Hmm.. So the top CEO makes in an hour (including vacation and sick hours, which of course most minimum wage workers don’t have)what four minimum wage workers make in a year.
It’s possible these people are making too much money; that is, they *possibly* could be replaced by someone of equal talent and knowledge of the business. There are certainly other dubious factors involved here – reciprocation through board memberships & salary committees, etc.
But what the infographic “implies” by these illustrated figures standing on the backs of the “common man” is really pretty ridiculous. This is pandering, pure and simple. Your argument for compensation is “No one should make that much money”? Really? Who put you in charge of deciding how much is too much? How much more does the baseball player make than the guy collecting the tickets? They both have the same employer. Sports salaries are often cited as outrageous, but I’ve never seen people take the same kind of offense to them that CEO salaries incite.
People are getting upset because these people make a lot of money. If your neighbor made $100k last week, would you hate and revile him and work to prevent him from doing that again?
Well ladies and gentlemen cicada represents the pillar of philosophy that our civilization has produced. Pretty damned paltry if you ask me.
The amounts that CEO’s get is most often nothing compared to the profits the companies they run make. Though many many of them run their companies into the ground and still walk away with armoured trucks leaking cash. If anyone is interested in keeping this system, just revel in the brilliance of cicada’s “philosophy” or be cowed by it.
One might hope that cicada is about to go to ground for another seventeen years soon, as his namesakes do, but we can’t wait for that. It is well past time for the shaking of heads and tut tutting. We need to end this system.
Lets start with raising the minimum wage to what ever it takes to live with dignity. $20.00 an hour?
It amuses me that some people here do not value the work of talented senior management. While a CEO can just be a figure head (these ones generally do not earn more than a few million a year), there are people out there who actually you know… direct their companies?
Really the employees said companies have should be grateful if the CEO is doing a good job because its keeping them employed. We don’t need pandering showing them ‘on the backs of the common man’ – thats just lame guys.
nah, that would be socialism. or communism. or whatever inflammatory term is popular at that moment.
i think we should lower the minimum wage to say… $1 an hour. after all, life is a big game of “get some dough” anyway. those suckers should just play the game better.
Those poor CEO’s! I mean, all that money will be such a burden for one’s mental health and discovery of peace and wisdom. A livelyhood justified by a philosophy indeed! A philosophy that we all feel in our bones can not be right – this nagging feeling of living in a broken world and being just another slave of it. Just a little piggie. I’d rather be poor then have that karma.
Oh, and @littlebrother: nothin ignoble about poverty; alas thats part of the same philosophy. I fully agree with the sentiment though.
One day the big guys on the graph and their like will find their heads on pikes.
Rich people should bear in mind that the harder you make life for the peons, the more likely they are to actually kill their oppressors.
@littlebrother Why stop at $20.00? Why not $100.00? or $200.00? I’ll never understand minimum wage laws, if you don’t think you’re being paid enough don’t work for that amount. In this life no one is owed a thing.
Cicada makes the false assumption that CEOs are playing on the same (and somehow level) playing field that the common worker is playing on. They’re not. They play on a field rife with cronyism and nepotism. They play on a field that excludes a great deal of actual tallent from ever entering the game.
There is no possible way for the average Americans to ever make it to the astronomical pay scale depicted in the infographic. The game is rigged. If you believe that somehow you, too, could have a piece of that pie, you’re either severely deluding yourself or you’re already a part of the plutocratic inner circle.
LittleBrother: Case in point – Robert Nardelli. All this leach does is run companies aground (for fat severence pay outs). See Home Depot and Chrystler for fine examples of this guy’s handiwork. This dude isn’t capable or qualified to run a corporation, but because he’s already in the inner circle, he gets hired again and again.
“One day the big guys on the graph and their like will find their heads on pikes.”
No lets just switch systems easily and safely and without horror. Not a single moose was frightened off, nor a single Insurance Company Exec “piked” when Canada began universal healthcare. Al it takes is conviction and votes and not standing for half measures.
“Cicada’s” remarks are why I’m not a “Libertarian”, despite the appeal of the concept. Social Darwinism is generally espused by people who wouldn’t last five seconds in the “jungle”, or in the ghettos of the Morlocks this society creates. When we agreed all those thousands of years ago to take turns keeping watch while others slept, and to share the mammoth carcass instead of fighting over it EVERY TIME, we opened Pandora’s box; society makes a deal that involves people looking out for each other and everybody has his version of how much is too much. Laissez faire capitalism produced this mess because people just won’t do the right thing when profit is involved. Many of us dislike the idea that everything is run for the good of corporations, and while I don’t think we’ll be seeing heads on pikes anytime soon, the Marie Antoinette attitude is a trifle disingenuous.
“Why stop at $20.00? Why not $100.00? or $200.00? I’ll never understand minimum wage laws, if you don’t think you’re being paid enough don’t work for that amount. In this life no one is owed a thing.”
I would support a union of minimum wage recipients, and I would enjoy the entire society coming to a standstill. If you want social disruption, then so be it. A few regulations and corporate charter changes are lot more palatable an alternative than the poster POWELL’s suggestion of “heads on pikes” but historically there are several ways to make these changes.
If you don’t like regulation, there are other methods.
See I want to stop playing “hardball” which is what forcing people to live on wages half or less of the poverty rate is, but if you want to keep playing hardball then fine.
But to me, and an angry, growing, number of others, it just isnt acceptable anymore.
This brings to mind the call Michael Moore renewed recently for redeveloping our economy along more democratic lines. Corporations, Cicada, are not entirely private concerns. They operate under a corporate charter from the state which historically meant more than it does presently. It meant that they exist primarily to serve the public good– by producing a product or service and employment that the public would benefit from having through their organization. If they don’t serve this function, we must renew and democratize the concept of the corporate charter. Minimum wage isn’t even the goal so much as a liveable wage. The corporations act as sociopaths that have disrupted our democracy and brought a supremacy of greed over the concept of the common good. They are, as a class, destroying the planet and people’s lives. They run as totalitarian units where people spend most of their waking lives under their controls. It’s time to question: “just what good do they do that outweighs these negatives?” And the ask whether taking down this social structure and developing new, 21st century alternatives based on better governance might help.
What a delightful debate. It is so difficult to defend free enterprise. However, proclaiming to all that CEOs can get paid whatever they want is pointless. The reality is that of course no one is advocating the United States switch to communism. The criticism over executive compensation is inherently a criticism of our corporate governance policies at our corporations. Do not confuse free enterprise with capitalism. For starters, most owners of public companies do not sit on the board or serve in an executive role on the companies they own–as a result, there is a clear misalignment of incentives. Stock options were a step in the right direction, but they simply do not solve our problem. The problem is that executives get huge salaries and bonuses in years when returns are high but do not suffer losses when things are bad (as do the owners). What will such a pay structure motivate someone to do? Maximize returns at all costs, even at inordinate levels of risk/debt. Such is particularly easy to do in the financial industry as banks can use derivatives instead of debt. Don’t go jumping to conclusions about derivatives either, although I know how tempting it must be to throw out numbers like $50 trillion dollars. Derivatives are not to blame for the crisis. They simply provide additional options for liquidity, investment and hedging. When times are good, derivatives obviously magnify returns, but when times got bad they sure can make things ugly in a jiffy.
I would support a union of minimum wage recipients, and I would enjoy the entire society coming to a standstill.
I agree with you there. Unions are way an effective way of enforcing wage controls without the government intervening. I support unions by actively shopping at union stores and buying union products. I just don’t support the US Federal government telling two consenting adults what to do. That goes for drugs, working agreements, or anything.
I would support a union of minimum wage recipients, and I would enjoy the entire society coming to a standstill.
You can approve of income disparities like this. (as Cicada does) You can disapprove of vast disparities in income between people. (as most of the rest of folks seem to)
But it’s just a plain fact that the disparity is increasing. It’s also a plain fact that it’s never been this large in the US. And I believe (though I couldn’t source it without more effort than this comment justifies) that it’s approaching the disparity levels seen in pre-Revolutionary France.
If some of those ultra-rich CEOs don’t wise up to the historical repercussions of really huge distances between the ultra-rich and the rest of the people they’ll get what they deserve sooner or later.
(and yes, I mean guillotines and “Tsars shot at the sides of railroad tracks” as kinds of repercussions)
-abs is in a foul and cynical mood this morning and would be fairly open to being a non-fictitious Madame Defarge if it meant he could watch a few Madoffs being beheaded in Times Square while he knitted
The short-term profit motive blinds the ultra-rich to the long view provided by history. The other side of that blindness is the loss of market to sell your goods to. The profits evaporate quickly when the other 297 million people in the country can no longer afford a given corporation’s products.
Larry Ellison is the founder of Oracle, a company with 85000 employees. Mr. Ellison doesn’t steal jobs from 5600 workers – on the contrary, 85000 workers owe their jobs to Mr. Ellison.
Bob Simpson founded XTO Energy. Aubrey McClendon founded Chesapeake. John Charman founded Axis.
Wasserstein’s annual salary is $1.2 million. Adkerson’s annual salary is $2.5 million. Iger’s annual salary is $2 million. Most of the compensation listed in this graphic is the value of stock options, most of which will never get exercised. Notice how many companies listed here are energy and financial services companies – two sectors whose stock prices were wildly inflated in 2008, but have since tanked.
Larry Page, Sergey Brin, and Eric Schmidt of Google each have an annual salary of $1, but (the first two, at least) are worth billions – an annualized rate higher than anyone on this graphic – and their company makes $1 million/yr. for each employee they have. How many jobs are they stealing from minimum wage employees? How much better off would the world be if their company went bust?
I just don’t support the US Federal government telling two consenting adults what to do. That goes for drugs, working agreements, or anything.
Oh poppycock. Just nonsense. There are about 11 billion pages of rules that govern how corporations run. Most of them protecting the owners from being responsible, and preventing unionisation and the like. We need NEW rules. Not NO rules, because NO RULES means corporations and the rich do whatever they like, which is just what we have now, times ten.
Supporting a reduced, crippled and near drowned democracy is the one path libertarians allow for “revolt” -Bush’s Herr Field Marshall, Grover Norquist, said it perfectly for all “libertarians” :
“I don’t want to abolish democracy. I simply want to reduce it to the size where I can drag it into the bathroom and drown it in the bathtub.”
Which has all the joy of making the corporations completely and absolutely in charge. No. NO THANK YOU. I’ll stick with democracy. And I guess you’ll just have to live with it.
For the rest of us, go to http://thecorporation.com/, find where its downloadable or rentable, have friends over, make a party, and make plans and talk.
Instead of beheading the CEO’s, why not work to improve yourself? Get the education you need (some companies will even pay for it), get the desire to move up the corporate ladder, and soon you, too, can be in upper management–even the CEO position.
That is the beauty of the free market and capitalism–it allows you to rise to your level of competence and desire. You just have to have the desire and keep abreast of the market to make sure you stay relevant.
There’s a problem with the graphic. Lazard Ltd., the company, had a net income of 113 million, not the CEO. GOOD screwed this one up. A couple of the others on the list are wrong too.
is the link.
Boingies’ robots added in the comma from the sentence.
I for one welcome…
curious, why won’t someone want to be an executive with this type of compensation growth.
What if this chart showed one of our salaries and then the number of third world folks who could live on it crouching below us? Personally, I think its nuts that a corporation pays someone this amount of money, but do I really want a government coming in and saying you can only pay your CEO “x” amount of dollars? What if I want to pay the kid who rakes my leaves 100 bucks an hour — should the government stop me for being too extravagant? Something is clearly wrong, but the solution is not in storming the castle of these CEOs and cutting off their heads. I sense to much envy is involved in that action …
Going to battle over executive compensation is like two goldfish arguing how to get out of the sealed tank.
How many CEOs do we have commenting here?
Well, I just incorporated, so count me as one. All I really want to say is this: if you make it to the point where you’re a CEO, you deserve a larger amount of money than those who work for you. Why do you deserve it? In my case, I deserve it because I work my ass off for 50-60 hours a week.
It’s not my business to tell these CEOs how much to keep and how much to give away. I’ve been trying to come up with a way to explain how I feel about this, and since I have either had not enough or too much coffee, I’m not doing a very good job, but here goes:
Some people have rather strange notions about what they need in life. Some of these people are CEOs, and some of those CEOs value THINGS much more highly than people. I think these people are sad, and deserve our pity. It’s fine to make a lot of money if you’ve worked for it, that’s one of the things that keeps people motivated to do new and interesting things. But when you get to that point where you’re making 1,000 times what a middle class family makes, you should really start looking at your priorities.
Also, I think it’s bad for business. When you make that much, I feel like you’re making poor decisions about where to put your money. Your company does well because its employees do well, so logically if you want to do even better, you should help your employees do better.
Sorry this is so poorly worded today, I think I’ve been spending too much time looking at code lately.
But Tim, in the first place beheading CEOs sounds like jolly good old fashioned fun.
In the second place, I don’t see how turning into an uberrich sleazeball counts as improving myself.
raising the minimum wage isn’t going to help… it’ll just mean thousands more people get thrown on the scrap heap as their jobs get outsourced to countries that don’t care about their workers health or the environment…
The Chinese have won the economic war by deliberately undercutting the western world and the corporations fell over themselves to help them by outsourcing production and other services to cheap countries just for the sake of a quick bump on the balance sheet to keep the shareholders happy…
Corporate laws need amending so that the long term health of the company has more importance than the current stock price. Executive compensation should also depend upon long term targets, not quick gimmicks to make the next quarter’s figures look good before they run to the hills with their severance packages as the company goes down the tubes.
“Instead of beheading the CEO’s, why not work to improve yourself? Get the education you need (some companies will even pay for it), get the desire to move up the corporate ladder, and soon you, too, can be in upper management–even the CEO position.”
Unfortunately, you make the false assumption that becoming one of these top-paid executives is based solely on merit. For Large-Mega-Businesses, it has nothing to do with merit, but is instead based on the Good’Ol Boy system – AKA cronyism / nepotism.
I have several friends who have post-graduate level degrees from prestigious universities, and plenty of ability. Unfortunately, their daddies weren’t buddies with the right people, so they will never be an executive for a Mega-Corp.
Look, I am generally for a free marketplace, but that only works when worth is appropriately valued. When we have executives who are paid to fail, they are being asymmetrically valued, compared to the rest of the companies employees. That is not capitalism.
Comparing CEOs to minimum wage workers isn’t really appropriate because there’s a wide gap of education and experience between the two groups. Hiring 8,866 minimum wage workers could actually do less than a single Bruce Wasserstein because the company doesn’t necessarily need thousands of workers with little education and experience.
Comparing with other highly trained, highly experienced professionals is more interesting. What would bring Lazard Ltd more profit? Having only Bruce Wasserstein or having 1000 more workers skilled and experienced enough to command a 133,000$ salary? What is Mr Wasserstein doing that’s worth the work of 1000 highly-paid employees?
If one guy gets nine slices… what the hell’s he doing with all that damn cake?
Hoarder or feeder?
Or just dynamically re-investing in the self-raising future of the workers?
Sure, sure; you don’t want to admit it but the rape of the middle classes is all in our best interests.
Let them eat cake.
That is not an adequate analogy, because these are artists that create a marketable product which is valued based on its intrinsic worth, adjusted by marketing.
Not all, but many top-level CEO’s are paid to fail.
Madonna did not make $242,176,466 by being paid to not sell a ton of albums, and not selling a ton of concert tickets, etc.
Life is not a zero-sum game. Only sadistic vermin need to rob their employees in order to increase their own happiness. If you can increase the amount of joy in the world you will gain respect, admiration, and support; otherwise you are less useful than your weight in well-rotted manure.
@littlebrother, et all.
“A few regulations and corporate charter changes are lot more palatable an alternative than the poster POWELL’s suggestion of “heads on pikes”
I should clarify, I don’t support “pike-based” reform. I was merely trying to express(ineffectively apparently) that I think the populace at large, may at some point, respond to this imbalance (weather it is perceived or real) with “stronger than words” actions.
Man, I’ve been thinking that we need to make the Tax Code more progressive with a top bracket of $1 million. This chart makes me think that the top bracket could be set at $10 million or even $50 million.
Yeah, damn those Chinese, working for lower wages than us to feed their families! They ought to demand more and starve, so as not to affect our wages here!
It’s funny how people can complain about outsourcing AND all those poor people living in poverty elsewhere; the reason YOUR wage is dropping is because it’s being normalized with the rest of the world. You don’t want that? Then you don’t actually care about the rest of the world, do you? Stop pretending you do.
Er…manicbassman, I’m not specifically talking to you, there. You never actually said you cared about the rest of the world… :P
@everyone: Who are we complaining about? The CEOs, for taking the money? Wouldn’t you? The companies, for paying it? As Cicada said (a little acerbically), it’s their money to spend, and ten thousand janitors don’t make up for one guy with a vision. If they’re really making a stupid decision, expect them to go under. If they’re making a stupid decision and they DON’T go under, then there’s an opportunity for you to step in, do things the smart way, and make your own billions. Don’t worry, you’re allowed to give them away.
Anticapitalists who complain about the economy remind me a bit of creationists railing against evolution; they’ll argue and complain, but they can never point at the specific place where their opponents are wrong. They pretty clearly have never bothered to learn the opposing argument. If they did, chances are they’d discover…well, both theories are elegant, explicative, and generally very hard to disagree with. In the end, economics is _math_. Wishing it weren’t the way it is is pointless; and the only way to effect change is to first understand the system.
Finally: The reason CEOs get paid a ton is the same reason why star athletes or movie stars do; when success or failure of a venture rest heavily on one person, you want the very best person for that job. You’re willing to pay a premium (even a ridiculous premium) to get _exactly_ the person you want. And, well, all three can actually make back more money than they’re paid (whereas, say, a welder cannot cause a company to double it’s profits).
The CEOs, for taking the money? Wouldn’t you?
No. You’re projecting your own morals. They’re not mine.
it’s their money to spend
No. It’s the shareholders’ money. Or it’s money that they sucked out of our tax dollars through corporate bail-outs. Have you been off-planet for a while?
The reason CEOs get paid a ton is the same reason why star athletes or movie stars do; when success or failure of a venture rest heavily on one person
No. That is true for Madonna and Shaq, but corporate executives are generally faceless, interchangeable drones who got their jobs through family connections. There’s also no relationship between what they’re paid and whether they’re successful. Michael Ovitz got $38 million in cash and $131 million in stock after sixteen months of driving Disney into the ground.
…it’s their money to spend, and ten thousand janitors don’t make up for one guy with a vision.
Nor can one guy with a vision do the work of ten thousand janitors. Especially if he’s basically envisioning how to milk the company for every red cent.
If they’re really making a stupid decision, expect them to go under. If they’re making a stupid decision and they DON’T go under, then there’s an opportunity for you to step in, do things the smart way, and make your own billions.
Just like all those bank executives went to the poorhouse last year and the boards appointed a bunch of Wall Street outsiders to reform the financial system? Thank goodness for capitalism, I would have hated for the public to have taken the hit for that mess.
The illustration really put one in perspective how large the gap is between ultra-rich and poor.
It would be interesting to showcase CEOs salaries from non-profit organizations and how many minimum wage holders they can support.
(Dunno how to quote)
That’s a matter of degree, then. Relative to some people, you *are* paid a fortune (I’m surmising, anyway). You accept more than some other people get. Your morals stretch that far.
You wouldn’t accept a ridiculous amount? Well…that’s fine, then. Maybe even commendable, though the money you don’t accept wouldn’t jump into the pockets of hungry orphans (whereas if you _took_ it, you could _put_ it in their pockets if you wanted).
Second point: Then the stockholders ought to stand up for themselves. They really ought to, no kidding! They have every right to do so. But, if they’re not complaining, they’re implicitly kinda supporting the actions of the people they *chose* to run the company.
And bailouts…heck yeah. That money shouldn’t go to CEOs; it shouldn’t have been given in the first place. It shouldn’t have been *necessary*. The root of that problem is government policies and weird regulations. But, agreed, it’s a little disgusting to see that money flowing to scumbags who caused the problem in the first place.
(Secondhand disgusting, I’m Canadian)
In my own personal opinion, companies are dumping far too much money on unproven dudes to run their companies for them; unproven, or even proved…imperfect, not to say incompetent. But the principle still holds: if one man is going to hold the fate of your company in his hands, you want to be sure he knows what he’s doing; that may require paying more than minimum wage. And, since you’ll be trying to outbid other companies with the same idea, you might quickly end up in the millions.
Very often, a sports teams will invest a fortune in an athlete who never really takes off; and I’ve seen famous movie stars who got paid a fortune to underwhelm me.
Striving for equitable distribution of money, or to eliminate poverty, is wonderful and commendable, but IMHO, if it’s done without an understanding of economics, it’s a fool’s quest. Understand the system, then hack it. If you can figure out _why_ a CEO gets paid enough to feed a small country, maybe you can figure out a way to avoid it.
“corporate executives are generally faceless, interchangeable drones who got their jobs through family connections”
Well, I suppose you could say that about Ford and some other companies, but otherwise there’s ignorance in the statement. If anything, high-ranking executives are people who have worked up to that position from within the company or are brought in like hired guns having made their bones elsewhere. But this idea of Yale roommates or somebody’s nephew strolling into the corner office without experience is, frankly, childish. I do agree that CEO compensation is alarmingly high and completely out of line, especially for those who failed to do the job for which they were so handsomely paid.
It’s funny the defenders of sky-high pay. I understand the belief in freedom and capitalism. Every one has that dream of “what-if?” What if it was me or that could be me. But let’s not kid ourselves. Capitalism is a pyramid. People at the top are supported by the people at the bottom. Yes the beauty of capitalism is that anyone is allowed at the top (ignoring reality- how hard it is, status quo, nepotism, sexism, racism, etc). But not EVERYONE can be at the top. Telling people that they are where they are because it’s their fault – not studying enough, not trying harder, not working harder – is just narrow minded. Even if we all had PHDs, vision, or the best work ethic, that doesn’t fit into the capitalism model. We all can’t be rich at the same time. Hence why I personally believe that “yes, you can be too rich”, minimum wage is a good thing, and a little socialism doesn’t hurt.
Corporate pay, as well as pro sports pay, rose so insanely because someone was willing to pay more for top talent. The next top talent wanted and got more and the pay for non-top talent rose as well. Do this for decades and you get this insanity. Think of it as a financial Moore’s Law.
Are these executives worth this much? Do they provide that much value to the company? Probably not. One of the things that hurts the economy most is the stock options these executives get. Because they have money in the game, they think about the next quarter instead of long-term growth. It’s one of the reasons we get bubbles so often.
There are a few options here. The first is to pass laws setting compensation. The government doesn’t have this legal right and to do so will lead to politicians having control of corporations. You’ll see decisions made not as to what works but what will make politicians happy. GM is going to make an electric car they admit will cost thousands of dollars more to make than it will sell for; they are going to lose thousands of dollars per car and could sell themselves out of business. Obama wanted the car, though, so it is being made. Chrysler was going to close a parts facility in Rep. Barney Frank’s district, but he told them not to and they obeyed; they will still lose millions a year because the facility is open, but Frank gets to save jobs in his district. On the other end of the spectrum, how did the left feel about Cheney’s ties to Haliburton? Did that work out well for the public?
The second option is to leave things as they are. Yeah, I can’t think of a reason for that, either. I actually giggled as I wrote that.
The third option, and in my opinion the best one, is to build a time machine to go back to the late 1890s to educate Teddy Roosevelt on modern economic theory and the history of the past century so he can do a thorough job of trust-busting and change the laws on corporations to avoid the mistakes of the 20th century.Then I go to the bar with him, because he’s got to be a blast to hang out with.
Until Amazon sells flux capacitors, however, we’re going to have to fight over a way to decrease the desirability of short-term stock manipulation over long-term growth. Some will propose heads-on-a-pike, others will want a cap on salaries. I’d like to see eliminating stock options and adjusting the tax/corporate law to favor small businesses (which produce 70% of new jobs, by the way, but usually pay taxes at the higher individual rate).
The important thing is not to assign blame at the expense of, you know, solving the problem. Blaming and hating are boring and a waste of our time, but they don’t accomplish anything. Messes like this don’t happen without many people and organizations working separately to screw things up with the best of intentions. Besides, Amazon is obviously at fault for having my flux capacitor on back order.
I don’t care how they do it or why. Pay me that much. Hell, pay me half that much. I’l take it and try my best. I promise.
I’m sorry I didn’t read all the comments, but the majority of those that think CEO pay is properly earned in the get the dough game I have one comment. Without us grunts you lose the game. You don’t even do your own dishes. Without you, we thrive….little house on the praire? no problem. You? crying like a baby. As some said when the SHTF, and it’s supper time Eat the rich!
Creating productive jobs is one of the hardest jobs there is – I’ve tried, and I can create a job for myself, but creating enough additional, productive work to make it worthwhile to hire another person hasn’t happened yet. I’ll keep trying, and if I succeed, shouldn’t I get some percentage of the income they produce (maybe 5%)? If I come up with a really good business, and have thousands of people working for me, am I being greedy if I continue skimming 5%?
TALUS – @ anyone that believes this to be A-ok damn the torpedoes!!
No one and I do mean no one single individual on the planet is “worth” that much money per year. If I were a stakeholder in these Corporations I would have to work as hard as possible to rid my company of these leeches! Maybe half of these salaries could be re-invested into the company??!!
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