Includes thoughts and comments about energy needs, resources, conservation and their relationship to politics at home and around the world.

Wednesday, September 05, 2007

Fortune 500 CEO Compensation

A recent article on dealt with this controversal subject at considerable length. It was noted that the average Fortune 500 company CEO's compensation in 2006 was $10.8 million or 364 times the average worker whose pay was $29,544 for the year. Most comments on the article expressed little concern with the compensation gap, noting that decisions made by the CEOs create profits from which dividends are paid to stockholders; wages, salaries and benefits are paid to employees, etc.; and the corporation's image is enhanced in the eyes of Wall Street analysts promoting the corporation's stock in the marketplace. I don't see it quite that way.

The current and growing compensation gap in private industry gives the free enterprise and capitalistic systems a bad name. I have always been a proponent of free enterprise and it will continue so, but I wish the CEOs would understand that the growing gap in compensation does little to encourage employee loyalty and trust. To the contrary, it destroys it. CEOs should stop and look closely at their organizations and see just who among their subordinates is working to produce the profit results of the corporation they work for. If they do they will have to conclude that there are many people down the line who are doing the job, not those in the boardroom. It's a lot like a major military campaign. Generals do the planning but it's the grunts down in the squads, platoons and companies who are doing the fighting and dying for their country.


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