And now for something completey different

A man with a fish playing a cello.

HAHA...Monty Python!

I've been on the rag a lot on this blog about ridiculous political happenings. And it could go on forever. So it's time to turn to another of my favorite hobbies- economics. Unless you live in China or possibly in a shanty-town, you'll have heard that CEO pay has increased yet again even while the economy tanks and the average American struggles to pay house notes, grocery bills, and energy bills. And yet, we accept this as right. I'm not saying these people don't deserve a hefty pay check. They are under immense stress and are expected to be omniscient and omnipotent. If that doesn't halt the old ticker I don't know what will. But let's think a little more about these compensation packages.

Point 1: Where is the money coming from? Even as people are laid off, unions are forced to accept pay cuts, and businesses are moving to hiring full time work without full time benefits, the CEOs of these same companies are raking in more wealth. So the money is coming to the CEOs by way of laying off the people at the bottom. Of course, if companies make more money, the CEO should get a cut. But when airlines, banks, retailers, and lenders are losing billions of dollars, CEOs should not be getting increases of millions.

Point 2: Who are businesses really looking out for? The answer is shareholders. Not the employees, not the employee families, not the ethics of capitalism, and certainly not the greater good. This is reaffirmed in every newspaper article, economic magazine, and tv news report. It's always about SHAREHOLDERS. No one gives two farts about the employees that make sure the company stays profitable. The secretaries are told "we can't give raises this year because business is down" even while the CEO gets a fat bonus. Companies will do anything to stay profitable and retain shareholders but will do little to help employees or see that employee wages reflect the companies finances. I have yet to meet anyone working for a corporation that said "we increased profits by 10% this year, so everyone got a 2% salary increase". And I've asked a lot of them. Who are the shareholders they're looking out for? People with enough wealth to invest. So we see the wealthy helping the wealthy and leaving the average worker with minimum wage, bad benefits, and an ass sore from the pounding.

Point 3: It's all about short term gain. High employee turnover, cutting important and necessary positions (secretarial, janitorial, etc.), and ousting older and experienced employees to avoid paying retirement benefits. These are signs of business emphasizing short-term profits at the expense of long-term market position, preparedness, and common sense. This is why calling a company is usually pointless- the employee turnover is so high that no one has time to learn the business and intelligently answer questions. It's about "returning to profitability" rather than taking calculated losses to be in a better position later.

Point 4: CEOs that say "I don't get a paycheck" are liars. They may not get a direct payment, but receiving millions of dollars in stock, complete health packages, a fat pension plan, massive death benefits, and payouts for early ousting (such as not doing a good job and getting paid to leave before your contract is up) are the same as a paycheck. The average worker does not have access to these benefits even though they are working hard, sometimes putting in more hours than the leadership. So stop the baloney. It's the just a cover and I'm not buying it.

Point 5: CEO pay should be tied to performance, just like everyone else. But even during years when markets are terrible or the company makes bad decisions, CEO pay keeps climbing. Let's be fair- if you give someone $10 million in stock as payment, even if they trash the company and cut its share price in half, they still walk away with $5 million and have done nothing but hurt the company, its employees, and the shareholders. And the company is out $5 million that could be used to increase business.

In Brandonland it works like this. CEOs will be paid a salary. They will get no special benefits. They will work hard like the rest of the employees. They will have to invest out of their own pocket instead of being handed stock in addition to their paychecks. They will not have entitlement to special privileges like personal use of company transport. They will get bonuses only if the company does well and only if the employees receive a cut of the profits. The CEO will live with the same benefits package as everyone else. This will accomplish several things. The CEO will become an employee subject to the same rules as the lower ranking employees, the millions of dollars saved in perquisites can be used to grow the business or to provide better salaries and benefits to all employees, those at the top will make more money than those below but will have to build their own wealth and act like all others in the marketplace (rather than being given a head start with options, portfolios, and grants), and the growing disparity between employee and CEO salary will be dramatically reduced since all employees will share in the company growth rather than only those at the top.

We can have a capitalist market, economic expansion, and a high standard of living without the stark disparities and inequalities that continue to get worse. Will there always be a difference? Yes. It's inherent in the current philosophy of capitalism. Based on education, training, experience, innate abilities, and work ethics, different people will be at different levels of an organization. And as you move up through the organization you will have more responsibilities and should be compensated accordingly. But you will also be held accountable for your performance, just like those at the bottom. There is no reason that the foundation workers of the business (those making minimum wage or a few bucks more an hour) should have salaries orders of magnitude below those at the top. There is no exact answer to how much more the top brass should make, but I think the average person would say that a $10,000,000 to $30,000 ratio is ludicrous. If my raises, bonuses, benefits, and salary are tied to the performance of the business, shouldn't the leadership be under the same constraints? All employees should share in the fortunes and failures of the business. That way, they all have an incentive to do the best work they can and they can have a career instead of just a job.