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Wednesday, September 01, 2004

Let's Be Nice, Let's Just Call It "Executive Excess"

I read this United for a Fair Economy report, and if I wrote this post right away you would not be able to read it out loud with your small children in the room if you are blessed with them. I know, it is just data, but personally I think this is the sort of data that should make a lot of people upset.

Apparently, the gap between haves and have nots,- or have-lots and have-littles in the US is widening even further. And not only that,- it appears that the CEOs who took business overseas have increased their income almost by half in 2003 (or the one-year period prior to the date of the report,- the exact timeframe of the study is not completely clear).
Average CEO compensation at the 50 firms outsourcing the most service jobs increased by 46 percent in 2003, compared to a 9 percent average increase for all CEOs at the 365 large companies surveyed by Business Week.
The report also touches on the politics-to-business connection (or should it be the other way around?).
Political contributions also appear to pay off. CEOs of the 69 companies that sponsored this summer’s Democratic and Republican National Conventions saw their pay jump 52 percent in 2003, far outpacing the 9 percent raise for the average large company CEO. Similarly, the 38 CEOs who have personally raised at least $100,000 for either the Bush or Kerry presidential campaigns earned an average of $15.2 million in 2003, 88 percent more than the average large company CEO.
There is also some data the authors of the report view as positive,- which it likely is.
The good news is that public pressure is beginning to have an impact. More investors than ever have demanded greater accountability from CEOs at shareholder meetings. Richard Grasso, CEO of the New York Stock Exchange, was forced to resign due to public outrage over his $140 million pay package. A number of companies and CEOs, including seven detailed in the report, have voluntarily supported fairer pay plans. The report also includes recommendations on how tax and corporate governance regulations could be reformed to help narrow the pay gap.
I am all for fair trade, and while I lack expert knowledge to judge many particular regulatory ideas in terms of their utility, their effect on business and their potential conflict with the civil liberties of those involved, overall the idea that cheaters must be caught does apply to me. However, laws can only take us so far, and attempts to pressure people by way of law enforcement has rarely forced them to abandon immoral practices,- in fact, such attempts have in fact often had the opposite effect in the real world.

What I believe is needed is a serious moral awakening of the society. We need to change,- not the Robber Baron CEO's, but you and I, the so-called regular folks, need to change. We need to admit that at some point or other we may have dreamed of striking it big, of joining the same league people like Kenneth Lay belong to. I certainly did, I admit it. Once we have admitted it, once we have realized that while it is OK to yearn for a reasonable comfort in life, it is immoral to try to grab all that you can, even if you don't need it,- then we can try and make those who squander what others actually need pariahs in the society. I want to see a day when a CEO like that walks into a restaurant and patrons just leave. Or when his kids are ashamed of him enough not to mention his name in a public place.

And I am not calling for laws limiting people's ability to operate in the free market,- I want public morals to do the job. I know, there will always be some people who could care less if they are despised as long as the loot keeps coming their way,- but those are true sociopaths whose number is very small. Most people, when forced with real public pressure, will alter their behaviour accordingly.

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