In his Aug. 6-7 Bangor Daily News column, Ronald Nykiel, dean of Husson University’s Business College, took up the defense of “fat cat” CEOs in America. He wrote of the 12- to 16-hour days they work. He wrote of the big responsibilities they have balancing many competing factors. He wrote of their concern for the families, of every person they fire.
He did not mention that the average CEO in America makes about 250 times as much as the average employee in his-her company. About 50 years ago, that differential was “only” about 30 to 40 times.
He did not mention that the boards of directors of the major corporations authorizing these over-the-top salaries are made up of people who themselves are usually executives with other major corporations, people who frequently serve on multiple boards, creating an interlocking directorate with a “You scratch my back, I’ll scratch yours” mentality.
He did not mention that, with their tax-evasive stock options and other tax-beneficial compensation, many of these CEOs are making $10 million to $30 million per year. He said these CEOs are represented heavily in charitable giving. While some are probably motivated by genuine concern for the charity or the community, all are motivated by the huge tax deductions that they get for their donations.
And their companies pay for the smart tax advisers that help them pay as little income tax as possible.
I’m not sure who twisted Mr. Nykiel’s arm to become an apologist for the unconscionable compensation packages CEOs get. A clue might be that he launched a dig at the perks of the president of the United States, whose actual salary is “only” about $400,000 per year.
Just for comparison, my daughter is a high school English teacher who, like a CEO, routinely puts in 10- to 12-hour days at school and then goes home to correct papers for more hours in the evenings and on weekends. She has to manage and educate classrooms with students who range widely in ability, some of whom are highly motivated and some of whom actively demonstrate, with their unruly behavior, their wish to escape from school.
The Fat Cat CEOs Mr. Nykiel defends often make almost 1,000 times as much as she does, but the staffs they manage are filled only with high achievers who want to be there. How is that equitable or fair?
And don’t get me started on their “performance” bonuses that are nearly automatic regardless of how the company does. Such incentives are not even available to teachers.
The “peer compensation benchmarking” justification for CEO compensation is repeated almost word for word, in the material sent out to stockholders for every company’s annual meeting, as follows: “We must pay a salary comparable with our competitors to attract and retain top quality leadership.” In the self-serving interlocking directorate of corporate America, this is how they take care of their own. These international CEOs send American jobs abroad, but the CEO still gets rich in America. This is the power and greed of corporate welfare.
After a million dollars or so per year (certainly enough to live very well), don’t the extra millions of CEO compensation just provide a way for them to brag, keep score and lord it over their neighbors and fellow CEOs? Given the unemployment and underemployment rates in the country caused by the recession that resulted from the greedy and incompetent practices of some of these very CEOs, aren’t there now some truly competent leaders out there who could and would work for less?
How much longer can our democracy tolerate this historically high disparity between the income and wealth of the rich compared to the middle class, let alone to those in poverty? How much more equitable would our society be if some of the CEOs extra millions in compensation went to extra salary and benefits for front line workers in their own companies, or even just to retaining American jobs in these companies?
Michael Fasulo of Linneus is a retired licensed clinical social worker.