Someone in my office just dropped a print-out on my desk of the story that is in wide circulation in the news about how U.S. CEOs earn in a day what workers make in a year. My response to him was: "So? What's your point?"
After he left, shaking his head about how clueless I am, I realized that I might have been a bit flippant about how I responded. Whenever I think of business leaders, I think in terms of entrepreneurs or results-driven managers. I don't think in terms of executives who don't perform by creating shareholder value (in fact, they quite often run their companies down) but who nonetheless get paid enormous salaries because . . . well, I don't know. Why do non-or-under-performing CEOs get paid the big bucks?
Damned if I know.
I have no problem with a Bill Gates or a Warren Buffett making big bucks. Even Larry Ellison. I do, however, have a problem with someone being paid megabucks simply because he is the head of Corporation X and because he 'has to' be paid as much as a similarly sized company, Corporation Y. The fact that Corporation Y makes seven gazillion dollars in profits for the shareholders whereas Corporation X makes only two tinygillion dollars is overlooked.
CEO pay should be based on performance. Always. And if profits go down, the guy (or gal) should be fired or have his or her salary cut accordingly. And these things should be spelled out right in the employment contract.
So, Pat, I apologize. There are definitely situations where CEOs are overpaid, often by ridiculous amounts, and I think that is not right. But . . . it is a matter for shareholders to deal with. If they paid more attention to the way the companies in which they invest are run, they might soon put an end to this nonsense.
They won't, of course. It is easier to bellyache and whine than to do something that takes a bit of work, like attending shareholder meetings, reading annual reports, or dumping the stock. That's just the way it is.