Yea, they love it. These guys just can’t get enough.
By Jack E. Lohman
So why does CEO pay skyrocket? Because it can, and the politicians that pass the laws — that are supposedly designed to protect the public — share in the CEO’s booty. That’s the way it is. It’s called political corruption.
As a retired CEO myself, I don’t think there is a CEO in this country worth over $1 million per year, TOTAL! I don’t care how big the company is, the sales department deserves the credit for growth. The CEO just manipulates the books.
Yet the trusted members of the board, to protect themselves from mismanagement charges, hire so-called independent “compensation consultants” (“so-called” because if they don’t play ball they won’t get hired again). And after all, the board doesn’t have to pay the bill, so anything goes.
But the advice always comes back with huge salary recommendations. And the board, who are usually appointed by the CEO himself, and since the CEO sits on their board as well, everybody tends to respond favorably.
Funny how that works.
But the shareholders get screwed
… because these gigantic pay packages come off the bottom line profits, and if your retirement plan is in that company, say a prayer. Actually, the consumers get hurt as well, but in both cases the so-called free market helps mitigate it.
So what do our trusty politicians do? They pass a law requiring shareholder say-on-pay of CEO wages. But the so-called “approval” is advisory only… not binding… and the board can simply ignore the advice. But if enough shareholders raise a ruckus we may see positive responses in the future (hopefully from politicians, but with them getting a piece of the action don’t count on it).
And, yes, when recession hits and high unemployment causes workers to accept low wages, the CEOs make out like bandits as profits increase. If you doubt that just look at the last decade. And as CEOs drain available employee dollars, fewer employees can be afforded.
And this week’s greatest hits on CEO wages:
- 32 Corporations Spent More on Compensation for Top Executives in 2010 Than They Paid in Income Taxes
- Studies cite CEO pay as significant cause of wealth inequality
- In 2010, CEO Pay Went Up 27% While Worker Pay Went Up 2%
- CEO pay soars while workers’ pay stalls
- 2010 CEO pay chart
- Economic Snapshot for March 2011
- Executive Pay at Big Companies Rising Fast
Both the Right and Left are drinking the Kool-aid and think the politicians are looking after them, when in fact they are both getting screwed for the sake of the rich guys that fund the elections. We must join together to eliminate our political payola.