ceo compensation and the sting of public disdain
we've all read how the ratio of CEO pay to worker pay has risen in recent years. in minnesota, compensation for executives from northwest airlines and united healthcare spark frequent editorials of the "oh, come on! you cannot be serious" variety.big-time CEOs such as warren buffet have also decried such compensation packages, railing "that a mediocre-or-worse CEO – aided by his handpicked VP of human relations and a consultant from the ever-accommodating firm of Ratchet, Ratchet and Bingo – all too often receives gobs of money from an ill-designed compensation arrangement."
but it really takes charles denny, the respected former chair and CEO of ADC telecommunications, to show us how bad things have gotten for former executives. this week, mr. denny slipped an astonishing parenthetical admisson into his fine strib piece on CEO compensation:
Public opinion is turning against business leaders. Poll after poll reflects growing public distrust in executives. The Harris Poll showed a drop in public confidence in major business leaders from 28 percent approval in 2000 to 13 percent today. Only organized labor, Congress and lawyers received lower rankings.
(As a former CEO, I feel the sting of public disdain. When my grandchildren ask me what I did at work, I tell them I was the company librarian.)
nice. what do you think they're paying the ADC librarians these days?
posted by christopher uggen @ 11:45 AM
2 comments
2 Comments:
NPR's had some stories about this, particularly related to Northwest Airlines. The argument for such compensation is always market based--that talent will go where the money is. With that argument, no one company can ever make a different choice. Maybe it's this public outrage that will make a difference.
On another note, I saw a brief story about Buffet on a recent airplane trip. I was surprised that he still lives in the same relatively modest house for the last 20 years or so. He also still drives his own car (a Cadillac I believe). Granted, he's still a billionare, but at least he's showing some restraint.
i agree, jerry. the oracle is an interesting guy. when i posted on him before (http://chrisuggen.blogspot.com/2006/06/how-warren-buffett-like-of-him.html), i got some not-completely-admiring comments. nevertheless, i'd still say that he shows admirable restraint.
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