"The median salary plus cash bonus for U.S. CEOs in office for at least a year totaled $2.3 million in 2004. That compares with $1.2 million for the heads of U.K. companies, $857,000 for the French, and $386,000 for the Swedish. Indian CEOs earn a median salary and bonus of $88,117 compared with $317,864 for the heads of Japanese companies, $302,078 at Hong Kong companies and $263,301 at Singapore concerns."I'm all for capitalism and the free market. I'm a firm believer in the laws of supply and demand. If you work hard at something and do it better than anyone else, you should be compensated for it. If you suck, you should be boot kicked out the door. However, Hymowitz found that CEO pay is NOT linked to performance, far from it.
"Newly named CEOs are guaranteed a trough of money before they've done any work. When they fail and are dismissed, they are handed even more money."Huh? I'm sorry, what alter universe did I fall into? Where did the free market go?
"...At Morgan Stanley, where ex CEO Phil Purcell received a severance and retirement package estimated at $106 million, including a new $44 million cash bonus for being shown the door. Former Co-President Steve Crawford is walking away with two years of severance estimated at $32 million after 3 1/2 months on that job."Why aren't shareholders screaming? Why would any board of directors ever so grandly reward incompetence? After so many recent scandals at major corporations, i.e., ADM, Adelphia, WorldCom, Tyco, Healthsouth, Enron -to name a just few- why is such flagrant corporate greed allowed, tolerated, even flourishing? I'm not a communist. I don't believe we should all get paid the same wage. Doctors should be paid more than garbage collectors. Yet, if salaries are no longer tied to performance, and the laws of supply and demand are now moot, shouldn't this be bigger news to economists?
Time to take a closer look at the portfolio.
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