From the Metropolis Fishwrapper:
WHEN we made our annual foray into the executive pay gold mine in April, chief executives’ earnings for 2012 showed what appeared to be muted growth on the year. The $14 million in median overall compensation received by the top 100 C.E.O.’s was just a 2.8 percent increase over 2011, the figures showed.
Well, what a difference a few months and a larger pool of C.E.O.’s make. According to an updated analysis, the top 200 chief executives at public companies with at least $1 billion in revenue actually got a big raise last year, over all. The research, conducted for Sunday Business by Equilar Inc., the executive compensation analysis firm, found that the median 2012 pay package came in at $15.1 million — a leap of 16 percent from 2011.
So much for the idea that shareholders were finally getting through to corporate boards on the topic of reining in pay.
At least the stock market returns generated by these companies last year exceeded the pay increases awarded to their chiefs. Still, at 19 percent in 2012, that median return was only three percentage points higher than the pay raise.
In other words, it’s still good to be king.
There is a bunch more if you want to read it. What is missing is an explanation as to why high CEO salaries are a bad thing.
Are CEO’s overpaid? Sure, but so are professional athletes, movie stars and television personalities. I like Bill Clinton and Sarah Palin but I think they are both overpaid for giving speeches. If I start making a list of people who are overpaid it will be a long list.
How much are your services worth? I dunno, how much can you get? There is a legal maxim that “The value of a thing is what the thing will bring.” Businesses exist to make profits. It is hard to argue logically that a CEO is overpaid if the company is making a profit.
On the other hand if the company is losing money the salary problem tends to be self-correcting. The company either goes broke or cuts costs.
If you own stock in a company then you have some say in how much the executives get paid. But unless you are an investor it’s really none of your concern. The last thing we need is a government bureaucracy deciding how much everybody should be paid.
If you have a better idea I’d love to hear it.