Executive Payola

There’s quite a rumpus, again, about executive pay. The amount our top CEO’s extract from us all has reached epic proportions. The Fortune 500 CEO’s average pay levels about 200 times that of our average workers. This is about 1,000 times more than it used to be back when the economy was doing well in the first decades after World War II.

This is absurd. It is sick. It is rapacious. It is an enormous disincentive to those in the bowels of every one of those companies. The corporate message is clear: work you butts off so our CEO can make an even larger bundle next year. Oh, and that might mean you all have to work longer hours and accept a pay cut. Efficiency, after all, can leave the world a harsher place. Especially if you have no power to rig the game.

CEO’s as group are on the make. They cannot be trusted. They are anti-social. They set a negative and destructive example to our youth.

I hope I am being clear.

I mean: do we all honestly think those corporations being ransacked for cash by their CEO’s are 1,000 times better off than they used to be? Is the economy humming along so superbly that we need to hand out outsized rewards to our top executives?

Well, now I think about it, profits stood up remarkably well during the recent crisis and now take a record percentage of our collective annual income. Perhaps that attack on wages needs to be rewarded. So I can see shareholders and capitalists everywhere being willing to fork over some of the gains.

Who needs workers anyway?

Oh. Wait. Someone has to buy all that stuff. Well, maybe the government can give them just enough handouts to allow them to shop a little.

Rats. The grand economic game is a little more complicated than those CEO’s think it is. They’ve crippled the consumption machine that produces the sales their companies need. Never mind. Give them a big pay increase. They need an incentive. Workers don’t. They just work. CEO’s lead. That’s worth a bonus.

No?

I mean, leadership is hard. Especially when you have such evident disregard for the people you are leading.

Addendum:

Hmmm. If an executive bonus is an incentive, wouldn’t an increase in the minimum wage also be an incentive? It might get more people to work. It might make them work harder. Isn’t that what incentives do?

Oh. No. wait a minute. I get it. Executive bonuses align management and shareholder goals. That means a bonus is share in the profit. Wages are simply a cost that diminishes profit, and don’t align anything with anything else. A share in the profit isn’t a cost, its, well, a share of the profits. Wages are just costs.

So bonuses are a good expense. Wages are a bad expense. Get it?

Neat trick. Very smart. Some CEO thought that one up no doubt. Give her a bonus.