CEOs are still paid too much, period.
Am I the only person grossly offended by current executive pay? The Bank of America CEO Kenneth Lewis took home $20 million for the job he did last year. As consolation for the 12,500 people he’ll be laying off nationally, the $1,200 per person he’s pocketing would only have paid their salary for a week or so, so it’s really not that outrageous after all. Besides, reports UNC Professor Tony Plath, it’s really in line with other CEOs of similarly sized companies.
Why is this expected to make sense? My conclusion isn’t that he’s properly paid, it’s that the rest of them are vastly overpaid. And with pay packages like that, they all have tens if not hundreds of millions in the bank. If they’d all reduce their salaries to manageable levels, the averages would be lower, and perhaps some of that money could be returned to the people working their butts off to make the company succeed.
I’ve heard people cry, “But how could they survive on less? They have a lifestyle to maintain!” Uh, huh. You’re saying they’ve made choices that give them a run rate 1,000 times the run rate of an upper class member of society? Poor them. If that’s what they’ve done in their personal life, how many more billions could their companies be taking home with someone who knows fiscal responsibility at the top?
There’s always the argument that he met all his goals and surpassed them. So frickin’ what???? The average person meets their goals at work and their reward is that they don’t get fired at the next round of layoffs. If they exceed their goals, maybe they get a $500 bonus and a 7% raise at their next review.
What does a CEO get? Regardless of their performance, they get the ego blast that comes with the title. And the ego blastwhich no doubt extends to the size of their critical biological equipmentonly gets bigger if they head up a huge company.
The CEO is being paid a salary (over a million dollarsenough to support a family of four for 20 years at a decent standard of living) to meet their goals. That’s their job: meeting and exceeding their goals. An average employee must work for their money, while CEOs need ten million dollar bonuses to motivate them just to come in and do the job we’re paying them a salary for!
Anyone that unmotivated doesn’t deserve to be heading up a company to begin with. In fact, maybe the CEO job should be the lowest paid job at the company. Then the only job candidates would be people with genuine aptitude, who care about the company and/or the people, and who are deeply motivated wanting the job.
I guess all in all, it’s just me taking out a bunch of frustration on poor, misunderstood CEOs. I just finished reading parts of the GEO-3 report which reports that we have about 1.2 billion people who don’t get enough fresh waster to survive, and 2.7 billion who wallow in their own garbage for lack of adequate sanitation facilities, living on less than $1/day.
Rather than funneling resources to these people, we give them to CEOs whose only possible use for an incremental dozen million is to platinum plate their already gold-plated toilet seat.
Rather than promoting business practices that keep people employed and attempt to create a prosperous society, we’ve adopted a virtual religion of funneling productivity savings into the pockets of executives. Sadly, layoffs seem a de riguer part of productivity improvements, these days.
If we’re getting more productive, we could use that productivity to make everyone’s lives better. But we don’t. Rather than applying the extra money to shortening work hours, improving quality of life, or restoring our environment or the healthfulness of our food, we leave many people jobless, overwork others, and give the profits out as bonuses and option grants to executives.
Someone, somewhere, has to be the one to stand up and change the system. And it isn’t going to happen until one of those CEOs actually says “No, thank you, I have enough.” to their next over-the-top pay package. And keep in mind that “over-the-top” probably applies to salaries as “small” as $500,000/year (a mere 10 times what many people are using to support a family of four).
It isn’t going to happen as long as we judge the reasonableness of wealth distribution using Plath’s logic, which basically says that the way we (over)pay now justifies continuing the trend.
And since I’m not a grossly, obscenely overpaid executive, I can’t stand up and make that change. But I promise: if I’m ever a senior executive in a large company, I’ll refuse an obscene pay package and return the money to the people who made it, rather than laying them off to improve my bottom line. Or at least, I’m pretty sure I’ll do that. Well, I promise to do it after I have a safe $10 million in the bank. Or maybe $15 million. After all, a person has to keep a little saved away for a rainy day…