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Executive Pay: The compensation racket flourishes
Executive pay continues to make the rounds for the wrong reasons; reasons that raise the wrath of observers, especially those at the bottom of the pay pyramid. A handful of examples should enlighten as to what is slammed as the massive disparity between the pay at the top and those lost at the median.
A recent survey conducted by 24/7 Wall St self-described as “a financial news and opinion company” provided some numbers and names that identified the leading earners among CEOs in the US. With all figures in US dollars, at number 101 came Mr. Michael Kaufman of Cardinal Health, who drew what was a relatively measly $8.6 million at a company that had $130 billion in revenues. It is not an altogether unreasonable nor arresting number. That occurs closer to the other end of the scale, and especially within the very top bracket(s).
Comcast Corporation, which is in cable, entertainment, and communications businesses, paid its CEO Brian Roberts $32.5 million on revenues of $84.5 billion, which lands him at the number four spot in the pay sweepstakes. It should be noted that fourth place received over four times (or 400%) the amount paid to Mr. Kaufman, who was at the 101st spot. Things are starting to soar and sprawl at this stage.
In third place was Disney’s Robert Iger, who did nicely for himself with a pay figure of $66.6 million on revenues of $55.1 billion. When his numbers came out a few months back, it did not sit too well in some very influential corners. As reported by CNBC’s Squawk Box, no less a person than Abigail Disney, who as can be guessed is a Disney heiress, had this to say on Executive Pay: “CEOs in general are paid way too much.” Amen. CNBC continued by mentioning that the heiress felt that no CEO quite measured up or could justify pay that is several hundred times the pay of median workers. Her exact words are more scorching: “If your salary is 700, 600, 500 times your median workers’ pay, there is nobody on earth, Jesus Christ himself, who is worth 500 times his median workers’ pay.”
There should be very few who would find powerful enough reasons to contest Ms. Disney’s positions. One wonders what she would have to say with regard to Messrs. Safra Catz and Mark Hurd of Oracle, who tied at the top with a salary of $108.3 million each on $37.7 billion in revenues. Seems like a gold mine of self-serving, while others languish. In most instances, if not all, CEOs have garnered a reputation for lining their pockets with both pearls and oysters to the tune of many millions. They do so while the rank and file toil to make ends meet, and have to fight tooth and nail for the pittances of percentage increases that is their annual reward.
It is a reward that leaves many with a bad taste in the mouth, especially when they learn of how much is the differential between their own compensation and that of the man at the top. Even a passing scrutiny of the 24/7 Wall St. survey on CEO pay would pick up that it is almost all men, and with very few minorities participating in the corporate bonanzas. Many times, these outrages occur because compensation committees are stacked by CEOs with ‘friendlies’ and familiars, who come in for their own share of the giveaways called honoraria.
In Guyana, government members awarded themselves and their opposition counterparts a hefty pay rise that rankled. Lesser, struggling citizens received the ‘imposition’ of crumbs. Change does come in self-serving ways: pay, pensions, parachutes, prosperity. In corporate and political life, the powers always look out for themselves and leave juniors to get by somehow. The little are paid to manage eating or clothing or housing, one only, rarely all three simultaneously. Thus, the compensation racket flourishes.
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