Blogs For Victory

The argument on the left is, essentially, that its just not fair for some people to make as much as some corporate CEOs. Such arguments are never made against Hollywood producer or superstar pay, nor against the amount of money Bruce Springsteen makes when not making what amounts to massive, in-kind donations to Democrats, but no matter. Buttressing the argument for caps is the immoral and asinine manner in which some corporations have taken bailout money and paid bonuses to executives of de-facto bankrupt firms. The other side of the argument goes thusly:

To be sure, executive pay in the United States is vastly higher than necessary. Executives in other countries, whose pay is often less than one-fifth that of their American counterparts, seem to work just as hard and perform just as well. The same was true of American executives in the 1980s.

So why not limit executive pay? The problem is that although every company wants a talented chief executive, there are only so many to go around. Relative salaries guide job choices. If salaries were capped at, say, $2 million annually, the most talented candidates would have less reason to seek the positions that make best use of their talents.

More troubling, if C.E.O. pay were capped and pay for other jobs was not, the most talented potential managers would be more likely to become lawyers or hedge fund operators. Can anyone think that would be a good thing?

I work for one of the larger corporations in the world. Previously, I worked for a smaller – though still quite large – corporation which was sold to the vastly larger corporation I currently work for. When this deal was transacted, the CEO of the smaller corporation I worked for received tens of millions of dollars…as if he had actually done anything in his entire life worth tens of millions of dollars. This was, of course, entirely legal and approved by the Board who, presumably, also made out very well in the deal. But it was immoral and should not have been done – I’d like to ask the guy how he sleeps at night, but I’d probably get an “on a pile of money with beautiful women” sort of answer.

Now, we must fight tooth and nail against Democrat attempts to let Congress set executive pay. This is because all we’ll have then is corporate CEOs bribing Democrats in order to be permitted to have high salaries (and anyone who thinks Democrats won’t go along with such things just hasn’t been paying attention to William “Cold Cash” Jefferson, Rod Blagojevich and, indeed, the entire pay-for-play ethos of Democratic politics). But this doesn’t mean there’s nothing we can do.

As to the argument that we must pay massive salaries in order to entice the best of the best into our corporate executive offices, I call bullsh**. The CEOs who are bankrupting our corporations today are the very sort of geniuses we were enticing with high salaries, and look where it got us. I have in mind, right now, three people I work with who I’d much prefer to be in charge of the corporation I work for (no, none of them are me) and I’ll bet they’d take the job for, oh, $250,000.00 per year and they certainly couldn’t make more stupid decisions than are currently being made and they might make much better ones (which I actually believe is true as they have a genuine appreciation of what is going on out there, while the CEO and senior executives are entirely too far removed from the day to day grind of the average folks).

My preferred route to bring corporate salaries – top to bottom – in line with reality and inject a bit of sobriety and solidarity in to our economy is to create tax advantages for companies where executive salaries are in line with average employee salaries. Certainly the big boss needs a high income – but if Joe Average is making $50,000.00 a year then Jane CEO shouldn’t need more than $500,000.00 to rest content. Companies can choose to pay massive amounts for the hot-prospect CEO who appears a genius because his last corporation had a great couple years (likely due to macro-economic factors rather than CEO smarts, but no matter), but they’ll get a tax advantage if they go with the really hard working mid-level manager who has genuinely innovative ideas and the guts to make decisions (one of the primary failures of our corporate executives is their fear of making decisions…make a decision and you’re responsible for failure, and that could jeopardize the golden parachute!).

There is nothing wrong with being successful. There is nothing wrong with being rich – even multi-billionaire rich…but there is something wrong with someone just walking in to a long established firm and making money off it as if he built it from the ground up over a lifetime’s work. We must be wary of attempts by liberals to take control, but we must also work out the ways and means of bringing reasonableness into corporate life.