| Our capitalistic democracy is all
skewed up |
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What about business?
Those who argue against raising minimum wages warn that businesses
will suffer by having to pay higher wages. In fact, the result would
be increases in layoffs rather than increases in wages, they say.
And who's the decision-maker in such scenarios? In the corporate
world, it's the CEO who has that tough decision to make. Yet the
ratio of CEO compensation to that of the average worker (not the
lowest-paid worker, mind you) is 400 to 1.
Let's look at how much the top guys make at two fast-food
chains, gleaned from the CEO compensation survey that ran recently
in The Wall Street Journal. After all, if you work at the bottom
of the fast-food chain, you can pretty much expect to earn minimum
wage.
In 2005, the jumbo jack CEO of the fast-food chain Jack in the
Box earned a salary of $938,500, plus a bonus of $1,242,000. This
represents a 9 percent increase from the previous year, and doesn't
include stock options, which added another $6.7 million to his income
last year.
The CEO of Wendy's International earned $1,092,000 last year (no
bonus was shown on the report). Realized stock options augmented
earnings to $12.8 million.
I can't help but be flabbergasted by these numbers. Want to know
how it breaks down per hour? It's too painful to reveal. Suffice
it to say that it amounts to several thousand dollars an hour.
David Silverman has an insider's point of view on
the subject of CEO compensation, having served as a board member
of a company and voted on compensation issues. In a recent issue
of SFO Magazine, he writes:
"Though I am a capitalist and believe that market forces should
dictate worth, when it comes to CEO compensation, the system we
operate under is tragically broken. It is not so much a moral issue,
although when the oft-quoted statistic is cited, that the average
CEO of a public company makes 400 times more than the average worker,
one wishes a SWAT team from the Federal Bureau of Ethics, would
be dispatched to terminate anyone responsible for doling out or
accepting such bounty.
"In business, one has to be willing to accept a certain amount
of moral ambiguity, as long as it is merely distasteful and no laws
are being broken. What is unacceptable, however, is that somehow
we have convinced ourselves that CEOs are worth the largesse that
we shower upon them, though there is little empirical evidence to
back this up."
I don't mean to knock CEOs. They have a very important
role to play in the business arena. No doubt. But there's something
wrong with a capitalistic system that so heavily rewards the few
people at the top, at the expense of so many at the bottom. And
to top it off, our political leaders seem to be much more concerned
about the plight of the former than that of the latter.
What's your opinion? Write to Boomer
Bucks and your letter will be considered for inclusion in a
future "reader feedback" column.
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