Bloomberg.com has released the CEO-to-median pay ratio for hundreds of large corporations, and it shows the average is around 204-1. That is, the average CEO takes home about 200 times the pay of the average worker. As few as 13 years ago, the average was 120-1. I dare you to tell me what is okay about this trend.
Do you want to fight? I’ll fight anyone, regardless of political leanings, what can possibly be right about the escalating greed being shown by US corporate leaders (okay, to be fair, corporations worldwide).
I get the whole “hey, they take on all that responsibility, so why shouldn’t they get what they can?” argument, but these trends are clearly coming at the expense of a quickly eroding middle class.
Take the JC Penney example given in the story. The JCP CEO took home 1765 times the average worker, and at the same time was making decisions that were driving the business into the ground. JCP recently launched an apology ad campaign to make up for the lax management decisions that drove people away.
But Jojo, you ask, “what about the escalating salaries of actors and athletes, they make all that coin and they don’t create jobs!” Okay, that probably is out of control too, but the truth is they do create jobs. You don’t think Beyonce and Jay-Z aren’t hiring hundreds of people?
Besides, those numbers are tempered by measurable results. If Tom Cruise fails to get box office, he won’t make as much next time around. Ask Jim Carrey what he’s getting per picture these days. Not nearly what he was ten years ago. Same for athletes. How did Ed Reed do when he went back to the well for more money. Oops, the flow got cut off because of his age, didn’t it?
CEOs, meanwhile can run a company into the ground, and still get another high paying job, as if nothing really happened. Meanwhile, 40,000 people lost their jobs at JCP last year, many because of mismanagement.
I’m not calling for government intervention, because that would only make the problem worse, but eventually, many corporations are going to have to realize their responsibility to the economy. Reinvest in people and not only will you have a full middle class to buy your products, you’ll have a happy workforce that works harder.