The Wall Street Journal reported last week that:"Executives and other highly compensated employees now receive more than one-third of all pay in the US... Highly paid employees received nearly $2.1 trillion of the $6.4 trillion in total US pay in 2007, the latest figures available."
One of the questions often asked when the subject of CEO pay comes up is:
"What could a person such as William McGuire or Lee Raymond (the former CEOs of UnitedHealth and ExxonMobil, respectively) possibly do to justify a $1.7 billion paycheck or a $400 million retirement bonus?"
Why is executive pay so high?
I've examined this with both my psychotherapist hat on and my amateur economist hat on, and only one rational answer presents itself: CEOs in America make as much money as they do because there really is a shortage of people with their skill set. And it's such a serious shortage that some companies have to pay as much as $1 million a day to have somebody successfully do the job. But what part of being a CEO could be so difficult-so impossible for mere mortals-that it would mean that there are only a few hundred individuals in the United States capable of performing it?
In my humble opinion, it's the sociopath part:
CEOs of community-based businesses are typically responsive to their communities and decent people. But the CEOs of most of the world's largest corporations daily make decisions that destroy the lives of many other human beings. Only about 1 to 3 percent of us are sociopaths-people who don't have normal human feelings and can easily go to sleep at night after having done horrific things. And of that 1 percent of sociopaths, there's probably only a fraction of a percent with a college education. And of that tiny fraction, there's an even tinier fraction that understands how business works, particularly within any specific industry. Thus there is such a shortage of people who can run modern monopolistic, destructive corporations that stockholders have to pay millions to get them to work. And being sociopaths, they gladly take the money without any thought to its social consequences.
Today's modern transnational corporate CEOs-who live in a private-jet-and-limousine world entirely apart from the rest of us-are remnants from the times of kings, queens, and lords. They reflect the dysfunctional cultural (and Calvinist/Darwinian) belief that wealth is proof of goodness, and that that goodness then justifies taking more of the wealth.
Democracy in the workplace is known as a union. The most democratic workplaces are the least exploitative, because labor has a power to balance capital and management. And looking around the world, we can clearly see that those cultures that most embrace the largest number of their people in an egalitarian and democratic way (in and out of the workplace) are the ones that have the highest quality of life. Those that are the most despotic, from the workplace to the government, are those with the poorest quality of life.
Over time, balance and democratic oversight will always produce the best results. An "unregulated" marketplace is like an "unregulated" football game -CHAOS. And chaos is a state perfectly exploited by sociopaths, be they serial killers, warlords, or CEOs.
By changing the rules of the game of business so that sociopathic business behavior is no longer rewarded (and, indeed, is punished - as Teddy Roosevelt famously did as the "Trustbuster" and FDR did when he threatened to send "War Profiteers" to jail), we can create a less dysfunctional and more egalitarian society. And that's an important first step back from the thresholds to environmental and economic disaster we're now facing.
-Thom Hartmann ( Exerpt: "Profiling CEOs & Their Sociopathic Paychecks, 7.27.2009. Image: Louis XIII Crowned by Victory (Siege of La Rochelle, 1628), Oil on canvas, 228 x 175 cm, Musée du Louvre, Paris, 1635).
14 comments:
Foolish writing, just because some one acts out of self-interest does not make them evil. And it work that CEOs do is worth of such payment then they ought to get paid such, no matter how it might seem incompressible to you that one person could have the abilities to handle billions of dollars and make a profit. Such a job is not easy if anyone can make such huge profits then they deserve a share of the profits they helped create. The more we allow the able to be rewarded for their success the better our whole economy does.
Clearly you miss the point... sociopathic? yes indeed
I think you may be onto something. My fellow commentators do not agree, clearly there is a common thread and all the threads you described make sense.
Democracy in the workplace is known as a union. The most democratic workplaces are the least exploitative, because labor has a power to balance capital and management. And looking around the world, we can clearly see that those cultures that most embrace the largest number of their people in an egalitarian and democratic way (in and out of the workplace) are the ones that have the highest quality of life. Those that are the most despotic, from the workplace to the government, are those with the poorest quality of life.
How do you qualify this and do you have any modern examples and sources you can cite?
ummmm let's see now...China & The Former Soviet Union are just 2...
What if it's the other way around? What if what makes you a sociopath is the $1.7 billion paycheck?
William McGuire or Lee Raymond's "corporate creativity" may or may not justify the paychecks and bonuses that they receive. However, what is clear is that there are enough people who believe it to the point to allow it to continue. In a capitalistic society, such as America, individuals can still strive to excellence as long as they have a service or produce people need or believe they need. Whatever the market will bear comes to mind; whether corporate CEO or movie star or rock star! Unfortunately, many times there will be "bottom feeders" who will feed off this to their own benefit just like the scavengers that they are, abusing others more than contributing to society.
Those corporations, heads of corporations or "rock stars of the world" who mistreat individuals, whether they are employees or stock holders or consumers eventually will come to ruin. However, it is sad that it takes so long. And, it is truly sad that many more allow it to continue on as long as they do. Once again, the scavengers are there allowing it to continue on because it benefits their greedy appetites. Therefore, we must have rules and some regulation. But, even here, greed prevails as we many times see in unions and in governments whether good intent or not.
I like to believe that most creative individuals do want to help others and want to create that which will benefit the majority of the good. At least, I feel, this is the greatness of America verses other countries. May we continue to remain so.
Ralf-George Reuth argues the dictator blamed them for both the Russian revolution and the collapse of the German economy. motor trade jobs
"They reflect the dysfunctional cultural (and Calvinist/Darwinian) belief that wealth is proof of goodness, and that that goodness then justifies taking more of the wealth."
Just an aside: I don't understand why you believe that Darwinism posits that wealth equals goodness. Perhaps you meant "Social Darwinism," which is a distortion of Darwinism and evolution. Darwinism does not define what is good or bad. Natural selection is a blind process.
I have three theories on CEO pay.
1) Board members actually believe that a CEO is worth what he is paid because he generates more money than he is paid.
2) Board members believe that no one who would work for significantly less could do the job.
3) Board members are buddies with the CEO, and the CEO is happy to return the favor of a huge salary in some other way.
Which of these three theories makes the most sense to you? Of course, theory 3 dovetails nicely with your own theory.
Beliefs are beliefs. Beliefs serve the believer not the whole.
I have only this quote from William Blum to add which I think applies to multi-national CEOs as well:
'... our leaders are cruel because only those willing to be inordinately cruel and remorseless can hold positions of leadership in the foreign policy establishment ... People capable of expressing a full human measure of compassion and empathy toward faraway powerless strangers ... do not become president of the United States, or vice president, or secretary of state, or national security adviser or secretary of the treasury. Nor do they want to.'-- William Blum, from the book Rogue State, p7
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This ties in well with the age long history of colonialism as well our obsessive love for capitalism and the rules of law.
Sociopathic leaders dominate the entranced masses who never tire of excusing their lawless ways. A sociopath is capable of changing colors from one moment to the next, all the time appearing to have genuine heartfelt feelings. Many also get pleasure from inflicting hardship and pain on others.
Its not about deserving a cut of the profit. That there is a clear connection between a companies profit and the compensation a CEO is paid, is pure myth. A CEOs hard work does not necessarily result in higher stock prices. In addition, a lot of CEOs do little more than outsource their work and claim credit for it.
I believe all of our leaders and stars are sociopaths. And we, the masses, are incapable of freeing ourselves from their spell.
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