CEO Pay

CEO PAY….A picture is worth a thousand words. This graph from the Economist demonstrates brilliantly the central problem with skyrocketing CEO pay: it’s not based on performance in any defensible way.

If today’s CEOs got paid more because they ran their companies better than CEOs of the 60s and 70s, you might make a case that they deserved the extra loot. But they don’t. As the chart shows, during the 80s CEO pay nearly doubled for a given level of corporate profitability, and during the 90s it increased again almost 4x. Overall, a CEO who generates $10 million in net profits today is paid about 7x what a CEO who generated exactly the same amount was paid in 1980.

Why? Because they can. When you cut through all the BS, there’s not much more to it than that.

Now: tell me again why those unionized grocery clerks are just a bunch of greedy bastards for thinking that their pay and benefits ought to rise too? Just curious.