Friday, January 9, 2009
CEO Salaries
I was reading the book for this class and came upon an alarming fact about CEO salaries. One stat the book uses is the fact that between 1980 and 2000 the average pay of regular working people increased just 66% whie CEO pay grew at a rate of 1,996%. This stat raises alarming points and illustrates a fundamental problem with our economy today. The distribution of wealth has obviously been lopsided and the rich have gotten enormously richer over the last 30 years. I believe this is most likely a factor in our current ecominic recession. The working person has been left to deal with the problems that the rich have helped create. While watching the presidential election in November I watched Obama say some things about distribution of wealth and how there was a problem with how salaries are distributed. I didnt realize how true this is until I read this fact in the book. I worked for a company with 100 employee's where nobody had ever gotten a raise without having a promotion and taking on additional job tasks. One day we found out that each of 10 members of the board of directors each had recieved a 150,000 pay raise per year. Just wanted to illustrate a point that is obviously true in our society today!
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The facts that you read have truly come to light in the last several months. With the downfall of many companies, we have learned about the "perks" that many CEO's and board members receive. Even worse are the golden parachutes that some of them have received. Now people like Steve Jobs are claiming they will take $1 salaries. I suppose if you make tens of millions of dollars a year, a $1 salary won't really hurt that much. But the every day worker, like you and I, must work for what seems like peanuts. I'm sure the big CEO's make lots of hard decisions but I doubt they are doing the grunt work that the rest of us must do. With all the layoffs and cutbacks now, I have yet to see any upper management taking pay cuts or scaling back. They are still getting bonuses. The average worker on the other hand has to worry about whether or not they may get a pink slip in the next year.
ReplyDeleteI was also disturbed by the statistic on CEO pay quoted in the book. I had heard there was at least a 300% disparity between what a CEO makes and what a regular worker makes, but I had not idea the gap was so much larger. I am forced to wonder if this is the result of a capitalist economy? But I feel I can answer my own question and say no, as the book states we are the country with the largest disparity between rich and poor. So it leads me to conclude there is something about American capitalism specifically that results in these kinds of ridiculous lopsided payscales.
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