Executive compensation is obscene by any ethical standard.
In 1980 the ratio of executive compensation was 42 times the average worker’s salary. Presently, executive compensation is nearly 400 times than the wage of the average American worker. Yes, it’s increased by a factor of ten, Dorothy.
This rate of reward, according to capitalist principles – if not common decency – must be directly correlated to the performance of these CEOs, right? So, how have the boys and girls in the boardroom performed since 1980 you might ask?
Well, American CEOs are perhaps the biggest group of screw-ups to coalesce in contemporary history prior to the formation of the Tea Party. Their performance has not increased by a factor of ten. Their performance, as evidenced by the smoking crater that used to be a vibrant U.S. economy, is a bit short of expectations.
To date, they have nearly killed the auto, banking, finance, and housing industries. No, they were not alone in these efforts, but chief executive officers are the folks with the fiduciary responsibility to protect their stockholders. We have every expectation that they are both capable and accountable so we should be outraged at their malfeasance and ineptitude.
Ironically, the executives running American business now are every bit – if not more – educated than the generation that preceded them. Unfortunately, whatever business acumen they have is completely undercut by spectacular ethical deficiencies as evidenced by more than their prodigious salaries. These denizens of our corporate culture have done more perp-walks in the last 10 years than the Mafia accumulated in the previous 50.
The American CEO of today is wrapped up in a soul-killing spasm of greed. The salaries and bonuses are not being derived as a reward from the realization of spectacular gains in company value, they are being underwritten by the salaries of former employees.
The executives accepting these egregious compensation packages should realize that they are built on a graveyard of careers and show a little humility. Instead of building monuments to their vanity, like a 12,000 square foot home, how about donating it to help the people so devastated by the grievous indifference and incompetence of your fallen brethren?
Keep in mind that salary is an expense, not an abstract component of some ethereal market imperative. Avaricious compensation plans for executives drain capital that might be better spent on proper staffing, better employee benefits, or investing in the long-term success of the company.
You would think a CEO would know that.
