CEO Pay & Perks
The subject of CEO pay is something that I hope is going to get a great deal of scrutiny over the next few years. And it will be for good reason. While I am certainly not against CEO's and believe they are hardworking individuals. However, the amount they are receiving as compensation is far out of line with the actual work they are doing, especially when compared to the average workers in their company.
There are many talented and productive CEO's in this country. I have had the privilege of meeting a few of them, at least in the medium sized corporations. There are also many that were in the right place at the right time, or had the right contacts to get them where they are. That doesn't mean they are not smart and capable. However, it may show that they are not so smart and capable that they have an ability far above many others. In fact, there are many working under them who could do as good a job or better if given the opportunity.
That said, I do believe that CEO's are deserving of extra pay and perks. They, for the most part, have to spend an inordinate amount of time on the job. They must give up much of their 'free' time to make sure everything is going right for their company. Often when they appear to be off the job, they are still on the job. Again though, the amount of their pay and bonuses have gotten out of line with their actual worth.
In the 1960's the average CEO was paid about 65 times the amount of the average worker. That has exploded to be almost 400 times the pay of the average worker today. In addition, the CEO has a wide array of extra perks, including huge retirement bonuses or severance packages. One that got a lot of press about a year ago was the CEO from Home Depot who was fired for poor performance and still walked away with over $200 million in severance. There should be responsibility for performance and these huge bonuses and pay packages should not continue simply because someone holds a position. There are times when a loss cannot be controlled by a CEO, then his performance must be evaluated on how he managed the company through that crisis.
The pay and perks are one aspect, but not the only one. There is also a subject of end of year, and sometimes end of quarter, bonuses. These have become so common that many CEO's that are managing companies losing millions of dollars are still getting huge bonuses, which only adds ot the losses of their company. They are doing this while cutting the pay and workforce of those working under them, at a much lower wage. Many times the foregoing of the bonus would have allowed the company to keep the workers and in turn help the economy continue in a better fashion.
These same CEO's that are being paid millions, being awarded huge bonuses, and losing money hand over fist in their business are often trying to say the problem is with the workers or just the times. They will say the workers are not producing enough and are being paid to much. If there is a union, then it is their contention that the union that is the problem. I suppose that they have been on on this gravy train so long that they have decided that they are entitled to this exhorbitant pay. That they possess something that is worth much more than all those people who are actually producing the product or service that is providing his or her salary.
Unions are not without blame completely, but they are also not the biggest problem. Unions were very necessary when they began. They were able to win a fair wage for their workers, and even for many that were not union members. They also were able to guarantee a safer workplace. As pay and safety increased they reached a point of needing to justify their existence. At this point they began to demand more than they may have actually deserved in many cases. However, that time has passed and the unions are once again needed to step forward and protect the worker and their jobs.
The safety and pay standards over the past few years have once again eroded to the detriment of the American worker. In addition, so many concessions have been granted to the huge multi-national corportations in the form of tax breaks, subsidies, and more that we have lost most of our manufacturing to foreign countries. Many of these same American companies are still reaping the profits, but much of those profits are not taxed in the US and our workers are having to take lesser and lower paying jobs in an effort to survive.
We have much work to do to even the playing field again. We are getting back to the same type of economy that was characterized by the robber barons at the end of the 19th century. Only this time we haven't found a Theodore Roosevelt to break them up. And our most recent administration is helping them along.
There is a need to reign in the CEO pay and to return jobs to America. While CEO pay isn't the sole problem by any means, it is a symptom as well as an actual problem that needs addressing. We need manufacturing here as well for our long term security. This is an economic and security issue and one we must address as a nation.
This cannot be accomplished by one person or one party. It will take someone standing up and saying what is right for our country however. He or she must be willing to take the abuse they will receive while they are convincing others to join and save our jobs, our companies, our economy, and our way of life.
There are many talented and productive CEO's in this country. I have had the privilege of meeting a few of them, at least in the medium sized corporations. There are also many that were in the right place at the right time, or had the right contacts to get them where they are. That doesn't mean they are not smart and capable. However, it may show that they are not so smart and capable that they have an ability far above many others. In fact, there are many working under them who could do as good a job or better if given the opportunity.
That said, I do believe that CEO's are deserving of extra pay and perks. They, for the most part, have to spend an inordinate amount of time on the job. They must give up much of their 'free' time to make sure everything is going right for their company. Often when they appear to be off the job, they are still on the job. Again though, the amount of their pay and bonuses have gotten out of line with their actual worth.
In the 1960's the average CEO was paid about 65 times the amount of the average worker. That has exploded to be almost 400 times the pay of the average worker today. In addition, the CEO has a wide array of extra perks, including huge retirement bonuses or severance packages. One that got a lot of press about a year ago was the CEO from Home Depot who was fired for poor performance and still walked away with over $200 million in severance. There should be responsibility for performance and these huge bonuses and pay packages should not continue simply because someone holds a position. There are times when a loss cannot be controlled by a CEO, then his performance must be evaluated on how he managed the company through that crisis.
The pay and perks are one aspect, but not the only one. There is also a subject of end of year, and sometimes end of quarter, bonuses. These have become so common that many CEO's that are managing companies losing millions of dollars are still getting huge bonuses, which only adds ot the losses of their company. They are doing this while cutting the pay and workforce of those working under them, at a much lower wage. Many times the foregoing of the bonus would have allowed the company to keep the workers and in turn help the economy continue in a better fashion.
These same CEO's that are being paid millions, being awarded huge bonuses, and losing money hand over fist in their business are often trying to say the problem is with the workers or just the times. They will say the workers are not producing enough and are being paid to much. If there is a union, then it is their contention that the union that is the problem. I suppose that they have been on on this gravy train so long that they have decided that they are entitled to this exhorbitant pay. That they possess something that is worth much more than all those people who are actually producing the product or service that is providing his or her salary.
Unions are not without blame completely, but they are also not the biggest problem. Unions were very necessary when they began. They were able to win a fair wage for their workers, and even for many that were not union members. They also were able to guarantee a safer workplace. As pay and safety increased they reached a point of needing to justify their existence. At this point they began to demand more than they may have actually deserved in many cases. However, that time has passed and the unions are once again needed to step forward and protect the worker and their jobs.
The safety and pay standards over the past few years have once again eroded to the detriment of the American worker. In addition, so many concessions have been granted to the huge multi-national corportations in the form of tax breaks, subsidies, and more that we have lost most of our manufacturing to foreign countries. Many of these same American companies are still reaping the profits, but much of those profits are not taxed in the US and our workers are having to take lesser and lower paying jobs in an effort to survive.
We have much work to do to even the playing field again. We are getting back to the same type of economy that was characterized by the robber barons at the end of the 19th century. Only this time we haven't found a Theodore Roosevelt to break them up. And our most recent administration is helping them along.
There is a need to reign in the CEO pay and to return jobs to America. While CEO pay isn't the sole problem by any means, it is a symptom as well as an actual problem that needs addressing. We need manufacturing here as well for our long term security. This is an economic and security issue and one we must address as a nation.
This cannot be accomplished by one person or one party. It will take someone standing up and saying what is right for our country however. He or she must be willing to take the abuse they will receive while they are convincing others to join and save our jobs, our companies, our economy, and our way of life.
posted by NHThomas | 11:19 AM
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