Saturday, March 19, 2005

Return to the Victorian Era

Robber barons, 'undeserving poor' and all. This from Nick Kristoff:

A study for The Wall Street Journal by Mercer Human Resource Consulting found that at 100 major U.S. corporations, bonuses for C.E.O.'s last year rose more than 46 percent, to a median of $1.14 million. Both the amount and the percentage increase were the highest since comparable studies began five years ago.

Companies have shaved costs by laying off workers and reducing health care coverage - and then using those savings to slather more pay on top executives. It's true that companies are now cutting back on stock options for C.E.O.'s, but it's hard to be impressed by that restraint when bonuses are soaring.


That study also found that public companies devoted about 10 percent of their profits to compensating their top five executives, up from 6 percent in the mid-1990's. That's a hijacking of corporate wealth by top managers.


Boards sometimes argue that they need to pay huge sums to hang on to talent. Really? Consider Mr. Eisner, who did a great job in his early years but has been a walking pay scandal ever since Disney earnings fell 63 percent in 1993 (after an accounting change) and he received $203 million. He has been so desperate to stay at Disney that he virtually Super-glued himself to his chair. If the board had wanted to pay the market price necessary to keep him, it could have offered a penny.

Here's a proposal - why don't they sell off the chance to sit in the CEO chairs on eBay?


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