Because They Can
According to the Associated Press the average pay for the head of a Fortune 500 company is close to $10 million. We are often told that CEO pay is linked to job performance, and if the stockholders don’t appreciate the job their CEO is doing they pay him less. In fact, stockholders have zero say in how much their CEO earns.
Portions of Dodd Frank offering stockholders voice in executive compensation failed to pass. The only recourse left to stockholders is a non binding suggestion on what they believe the CEO is worth. But nobody is legally obligated to listen to stockholders. Wonderful system we got going. The head of a corporation gets to crap on the employees and the stockholders. The richest one percent are answerable to nobody, even their investors.
The free market doesn’t mean the guy on top is free to ignore the needs and wishes of everyone below. And just because you can get away with something doesn’t make it right, or good for your stockholders and employees.
In America’s version of capitalism it no longer matters how the company actually fares, the CEO gets his money. Stock price goes down, he gets his money. Company goes bankrupt, he gets his money. The workers and the stockholders wait at the bottom for crumbs. Capitalism when rigged is not capitalism. It’s grand larceny.
From the AP article:
CEOs managed to sell more, and squeeze more profit from each sale, despite problems ranging from a downgrade of the U.S. credit rating to an economic slowdown in China and Europe’s neverending debt crisis.
Still, there wasn’t much immediate benefit for the shareholders. The S&P 500 ended the year unchanged from where it started. Including dividends, the index returned a slender 2 percent.
So who determines the CEO’s pay? The CEO. The CEO’s salary is set by a compensation committee, and members of that committee are appointed by, get ready, the CEO. Normally the CEO is wise enough to appoint other CEOs to sit on the compensation board. That way he is able to guarantee his salary isn’t based on job performance. Instead it’s based on whether or not the other CEOs, his cronies, trust each other to vote each other a salary bump when it’s time to sit on their compensation board.
This is not the cream rising to the top. It’s not a meritocracy. It’s crony capitalism. It’s uncreative bullies keeping money in the club while they lay off thousands and ship jobs overseas. These salaries are an attack on Free Enterprise. There is no Middle Class because of this greed, and ingratitude.
This has to stop. We’re at the tipping point and pretty soon the takers will find there is nothing left to take. Government stepped in and saved these corporations, with our tax money. Now it’s time for government to step in and save workers and stockholders from these corporate pirates.
What’s good for business is good for America. Sadly what’s good for the men running these businesses isn’t necessarily good for business.
Originally Broadcast May 24, 2012. Colin Powell should shut up. Paul Dooley, Jimmy Dore and Frank Conniff. Please subscribe to our show on iTunes, and follow us on the oh so evil Facebook.