There are many CEO fish in the tank today. Some do charitable things with some of the money they make. Some promote integrity within their chosen fields like Chad Dreier does (Ryland Group Inc - RYL - CEO).
However, this blog post will delve into "Paycheck Traditions, from Banking to Broadcasting". It is a 2/13/09 blog post from the "Howzit Howard" blog. Howard starts off saying: "The nation’s leading investment house CEOs went before the House Banking Committee this week and were asked to explain why they continued to pay massive bonuses to themselves and their people at a time when the their own greed and incompetence has thrown the entire world into economic crisis." He examines "why each profession pays what it does", and ends up saying that it is "because it’s used to doing that." Here is my take on the subject.
When I was younger, and being tested for a straight commission, "point of purchase" advertising, sales management position, a 6 hour psychological profile test told my upper management that “I believed that everyone should be on straight commission.” Now that I am older and hopefully wiser, I realize that some positions, like “dirt digger” would be hard to quantify the total yearly "value added" aspect of that basic, but important in some circumstances (archaeologist's helper carefully digging dirt away from a “find”), job function.
Yet, in a 2/13/09 NY Times article entitled “Jack Welch and the Lone Ranger Theory”, there is a quote from a Mark J.Perry, economist, blog post entitled "Maybe CEOs Like Jack Welch Are Underpaid?" that says: “When Jack Welch became General Electric’s CEO in 1981, the company was worth about $14 billion. Through hiring and firing, buying and selling decisions, Welch turned the company around and when he retired 20 years later, GE was worth nearly $500 billion. What’s a CEO worth for such an achievement? If Welch was paid a measly one-half of a percent of GE’s increase in value, his total compensation would have come to nearly $2.5 billion, instead of the few hundred million that he actually received.
Bottom Line: You could probably make a stronger case that Jack Welch was underpaid and exploited by his shareholders GE’s Board of Directors than making a case that he was overpaid as a CEO.” This general concept agrees with my basic feelings of “Pay For Performance”, and my test results.
However, a 1/2/08 comment on that same Mark J. Perry’s blog post by “Walt G” says: “The premise of pay for performance is negated when there isn’t any positive performance (golden parachutes). If the CEO is taking credit and PAY for things when they are going well (whether he or she is actually the reason), then, let the CEO take the blame and NO PAY when things are going poorly (whether he or she is actually to blame).” I like that concept because it brings into play the higher concepts of Charity and Integrity. Why wouldn’t a financially successful CEO who will probably never be a “beggar in the streets” agree to temporarily reduce his/her total earnings to $1.00 per month or even per year? He’d still have his “perks”, but that charitable show of goodwill, and self sacrifice, would actually be the best PR that he could do to sell himself to the next large corporation he’ll work for. It would prove his love of what he does for a living, while giving back to one of the compainies who made that CEO well off. It would, also, help change the current negative press about "CEO Compenstion" into positive press. Plus, that money saved by the corporation could be reinvested wisely in some way as to try to increase sales! Now THAT would be showing CHARITY and INTEGRITY (most looked up word for the 2005 Mirriam-Webster Online Dictionary). (On 4/23/09 Ethisphere.com's article "Jeff Immelt, CEO of General Electric, Agrees to Eliminate Multi-Million Dollar Bonus" proves that Jeff Immelt has integrity, as he became "a taker"!)
Alas, the short term thinking that is plaguing everyone (I fight it myself!) has spawned too many generations of people without meaningful Charity, Faith, Hope, and Love. Let’s all “get back to basics”, as they say, and stop taking “Separation of Church and State” to such extremes that we lose sight of the massive benefits of ethical long term thinking mixed in at appropriate times and with appropriate amounts in everything we do, for all our sake, and for the sake of our future generations. After all, who will pay for the Stimulus Bill? Will it be the future generations of the top paying jobs, like CEO's? Or, will some CEO's figure out "How To Take It With Them"?
In "Sermons that Work", it says: "Have you a will? Have you taken time to think about who is important in your life, and how you would like to thank them, or be remembered? Have you decided what your treasures are, and how those treasures will be divided - or have you tried to figure out how 'to take it with you?'" It goes on to say: "The night before the flight from Egypt, and the night before the crucifixion." that "This is still God's night. His night to prepare us for a life where death is identified not with the end, but as a beginning. He prepares us by commanding us to love one another as he loves us, see in each other what he sees. Seeing through his eyes allows us to let go of our prejudices, our fears and expect life where we did not know it before. Seeing through his eyes allows us to die and live again, live again in love, in resurrection." It ends up saying: "Say "Amen" by allowing his eyes to become our eyes, his hands to become our hands, his life to become our lives. Say "Amen" and know the treasure of his love."
Yes, "Howzit Howard", “..each profession pays what it does because it’s used to doing that.”, and we all should (in the case of some overpaid jobs), and have to (in the case of some not overpaid jobs) NOW get UNUSED TO many things that we are very USED TO! I wonder if God’s “tough love” had something to do with that?
Fish Tank Image Courtesy of "Dream Aquarium Screensaver" (No Affiliate Program Established!)