Monday, November 17, 2008

CEOs worth every penny they make?

One thing the financial meltdown should do, if it doesn't do anything else, is put paid to the claim, made ad nauseam until early this year, that corporate CEOs are worth their astronomical "remuneration packages".

How many times were we told that these economic supremos were so far ahead of us, in terms of financial expertise, that they deserved every penny they made? If we didn't pay them $5 million a year (or whatever), they would simply take their knowledge and experience elsewhere — and we would all suffer as a result.

I remember an incident in the 1980s, when my company's big boss briefly stood behind my desk in the editorial office of the Manawatu Standard and cracked a few jokes with the sports editor. He was there for only a few minutes, but I later worked out that he had been paid more for those minutes of jocularity than I was paid for a whole week of hard work.

When he went out for a run one day, and died of a heart attack, he was replaced at the trough by someone else, on an equally high rate of pay. But neither he nor his successors were able to reverse the steady loss of newspaper readers. In the end, all they could do to maintain profitability was make more and more people "redundant" — and thereby lower the standards they were charged with maintaining.


Anonymous said...

I recently came across your blog and have been reading along. I thought I would leave my first comment. I don't know what to say except that I have enjoyed reading. Nice blog. I will keep visiting this blog very often.


Alan Ireland said...

Thanks, Betty. I'll try to keep it up.