RE: CEOs cash in, but how many are worth $100 million?
Silly, brainless article by a clueless author.
It appeals to some odd notion of "fairness" by indicating that the ratio of CEO salaries to those of other employees has some real meaning. Underlying the entire argument is the idea that compensation should be based on merit instead of performance.
I'll admit, the author tried a new twist on this tired, trite subject. He (or she) tried to bring stockholders into the picture. I guess stockholders need social justice these days as well. But the author tried to make CEO performance out to be based on the success of people who have invested in the company's stock. Note, I did not say invested in the company. The only time shareholders actually invest in a publicly traded company is during the initial public offering. The pieces of paper traded every day at the New York Stock Exchange and the NASDAQ are not little pieces of the company, as most would like to believe, but I digress...
What a CEO is paid is really no business of anyone's but the CEO and the board of directors. The author appeals to some undefined entity (probably the government) to grant stockholders more power over CEO salaries. The author appears to want to turn publicly traded corporations into participatory democracies. If such a thing were to happen, CEOs would certainly reap smaller salaries, but so would everyone else, including investors. The corporation would be out of business in a week.
In any case, stockholders do have a considerable amount of power and they exercise it on a daily basis: they can vote with their feet. If the general feeling of stockholders is that the company is poorly run, they will sell their stock. This will cause the price of the stock to go down and will adversely affect the ability of the corporation to borrow money and conduct operations. Once again, this is obviously not happening, so the author's bleating over the powerlessness of shareholders is a nothing but a rhetorical sham. It is fodder for demagogues.
Leftists, a group of which the author is obviously a member, want to have some arbitrary measure of merit and, therefore, a measure of what someone is "worth." This is tyranny of the worst sort. A CEO is, by definition, "worth" what he or she is paid simply because the pay was disbursed and the CEO wasn't fired. I would be the first to admit that corporatism and capitalism have less and less to do with one another, but in this case, the most fundamental tenet of capitalism is being exercised here: payment for performance. What the author of this piece doesn't comprehend is the scale on which performance is judged.
In any case, the entire argument over CEO salaries really reduces to one equivalent to a five-year-old child whining that his playmate's toys are bigger than his. It's just not "fair."
It appeals to some odd notion of "fairness" by indicating that the ratio of CEO salaries to those of other employees has some real meaning. Underlying the entire argument is the idea that compensation should be based on merit instead of performance.
I'll admit, the author tried a new twist on this tired, trite subject. He (or she) tried to bring stockholders into the picture. I guess stockholders need social justice these days as well. But the author tried to make CEO performance out to be based on the success of people who have invested in the company's stock. Note, I did not say invested in the company. The only time shareholders actually invest in a publicly traded company is during the initial public offering. The pieces of paper traded every day at the New York Stock Exchange and the NASDAQ are not little pieces of the company, as most would like to believe, but I digress...
What a CEO is paid is really no business of anyone's but the CEO and the board of directors. The author appeals to some undefined entity (probably the government) to grant stockholders more power over CEO salaries. The author appears to want to turn publicly traded corporations into participatory democracies. If such a thing were to happen, CEOs would certainly reap smaller salaries, but so would everyone else, including investors. The corporation would be out of business in a week.
In any case, stockholders do have a considerable amount of power and they exercise it on a daily basis: they can vote with their feet. If the general feeling of stockholders is that the company is poorly run, they will sell their stock. This will cause the price of the stock to go down and will adversely affect the ability of the corporation to borrow money and conduct operations. Once again, this is obviously not happening, so the author's bleating over the powerlessness of shareholders is a nothing but a rhetorical sham. It is fodder for demagogues.
Leftists, a group of which the author is obviously a member, want to have some arbitrary measure of merit and, therefore, a measure of what someone is "worth." This is tyranny of the worst sort. A CEO is, by definition, "worth" what he or she is paid simply because the pay was disbursed and the CEO wasn't fired. I would be the first to admit that corporatism and capitalism have less and less to do with one another, but in this case, the most fundamental tenet of capitalism is being exercised here: payment for performance. What the author of this piece doesn't comprehend is the scale on which performance is judged.
In any case, the entire argument over CEO salaries really reduces to one equivalent to a five-year-old child whining that his playmate's toys are bigger than his. It's just not "fair."
posted by Anonymous | 10:14 AM
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