MSN Money -- Last year was a very good year to be an average CEO.A typical chief executive at a U.S. company earned 262 times the pay of a typical worker in 2005, according to a recent report.
With 260 workdays in a year, that means that an average CEO earned more in one workday than a worker earned in 52 weeks.
Well heaven forbid the guy on whose shoulders the success or failure of an entire Fortune 500 company rests should be compensated according to his performance of his responsibilities!
Isn't this the stockholders problem? If they think the CEO is competently guiding their company to reap profits in the marketplace thereby enriching them, why shouldn't they approve whatever compensation package they see fit to approve? If the stockholders loose money and the company looses value due to his poor leadership and imcompetence, they can always fire him.
The reason workers don't get paid a lot is because there a thousand guys who can do their jobs. With these really big companies, there are a handful of guys who have the business skill to keep or make the company profitable.
"But Ed" you say, "why should that guy make so much more than me when we work for the same company...it's still just a job?" I just told you why. Could you guide a complex, diversified company with thousands of employees through the labarynthian maze of government regulations and constantly evolving market dynamics and out-compete the competition for market share and huge profits? The answer is no.
It's all about class envy. People automatically think, probably because the media like to portray it this way, that rich people got rich by cheating, stepping on the little guy, or just by blind dumb luck, when the fact is they got rich by making wise decisions, by being educated and motivated, and by recognizing opportunities when they present themselves.
Poor people are poor because they regularly make bad decisions, fail to get educated, are less motivated and fail to take advantage of opportunities.
The job of CEO is worth whatever the shareholders are willing to pay somebody to do it, and the job of machine operator on the factory floor is worth whatever the shareholders are willing to pay somebody to do that job.
Would you pay the stockbroker next door $1000 to cut your grass when there are 50 kids in the neighborhood willing to do it for $10? Likewise, would you let the kid cutting your grass choose your retirement investments because he was willing to do it for $10?
We need to stop jeolously fretting about what other people are earning and concentrate on making good decisions for ourselves so we can be rich too.
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