Wow, talk about prescience.
Yesterday, Dafydd ab Hugh went after Barack Obama’s call for “more corporate accountability.” Then, this morning, the Boston Globe decides to echo Obama’s call for Congress to get in on the compensation of CEOs.
I am reminded of the old rebuttal some people said to the Catholic church, when priests sworn to celibacy lectured about the evils of birth control: “you no play the game, you no make the rules.”
The big controversy seems to be among those publicly-traded companies. As the Globe notes, there are a lot of CEOs and other high-ranking corporate muckety-mucks making big bucks whether or not their companies make or lose money.
My response is this:
Every employee — from the lowest janitor to the CEO — is going to try to get the most compensation out of their employer they can. That is simple self-interest, and that is human nature. And it is the nature of an employer to give the least compensation it can, out of its own self-interest.
The Globe (and Obama) are upset because they think these companies are paying their CEOs too much, in disregard for the economic realities. They get raises whether or not the company does well, they get “golden parachutes” and other sweetheart deals that don’t reflect the overall economic health of the company.
Again, I say, so what?
These things are, ultimately, self-correcting. If a company makes a lot of very bad financial decisions, then eventually it will dumb itself out of business.
When I was younger, I hit a bit of a bad streak for employment. I rode three consecutive employers into either bankruptcy or out of business entirely. Each time it sucked, and each time I moved on. And in each case, my prior employment was not held against me, because it was obvious I was a small cog in a bigger machine and didn’t have anything to do with the decisions that wrecked my prior employer. (Although I did start to wonder if I was some sort of “Typhoid Jay.”)
If a CEO or other bigwig rides a company into trouble, though, theoretically it should put a big black mark on their employment record. Unlike the little people like me, the CEOs actually have some responsibility for the overall success or failure of the company as a whole.
If that doesn’t happen, if some CEOs can keep collecting hefty compensation packages despite piling up a track record for failure, then that is a problem.
But it ain’t mine. And it likely ain’t yours.
Corporations have a legal responsibility to their owners, not the general public. And it’s established law that corporations have a fiduciary responsibility to their stock holders to maximize their profits. And when they violate that, then they can be sued.
So if you don’t like how companies are conducting their affairs, you are free to sue them and compel them to act more responsibility.
IF you can prove that you have a personal stake in the matter.
If you’re horribly upset about the head of the Blackstone Group giving its boss about a third of a billion dollars in a single year (as the Globe is) or appalled at the way the current management of the New York Times (which owns the Globe) has totally and utterly destroyed its credibility and flushed its sales and revenues right down the toilet, then buy some stock and make your voice heard.
In other words, if you wanna make the rules, get involved in the game. Put your money where your mouth is, and demonstrate that you are truly and seriously involved in the matter, and you can have a say.
If you’re really that upset, then vote with your wallet. Don’t do business with those companies that are so stupid as to keep giving their bigwigs such astronomical pay. Find out who gives them the revenues that they’re paying out, and don’t give them your business, either.
But if all you want to do is stand there and point and howl in rage about how other people are spending their money, then please feel free to STFU.
As Dafydd noted, you gotta stretch the hell out of the Constitution to make it a matter for urgent Congressional attention.
Besides, I hear there might be a baseball player somewhere who might have used some kind of drug, and if that foul corruption of the national pastime isn’t stopped by Congress, lord knows what sort of havoc that might wreak.