All Rights Reserved © 2005 Thomas W. Day
I've heard at least a zillion explanations for why executives are worth the humongous salaries they're paid for doing the mediocre work they usually avoid. Not a one of those justifications makes a lick of sense.
The dumbest is the comparison between professional athletes and executive salaries. The story goes that if an uneducated street kid who happens to be able to run fast, throw a ball hard, jump high, and/or coordinate his hand and eye at a superhuman level is worth X-million-dollars a year, it should be obvious that the CEO of a Misfortune 500 Company deserves even more money for whatever the hell he does. Sort of an if X=Y, then Z=$6,000,000 kind of logic.
First, we have some standard of comparison for the athlete, even if it's totally irrational because some dumbass CEO is the fool who decides what the athlete is "worth." At least the athlete has to be able to do his job well enough to produce points or prevent them from being produced before some silly executive will assign a value to that job. Second, it's indirectly possible to pretend that there is a marginally direct link between an athlete's performance and the dollars spectators will spend to witness that performance.
No such logic exists for executive salaries. An exec can completely suck at his job, providing no leadership, no technical skills, no Big Picture insight, and no useful reason for his or her existence and that exec can still drain big bucks from the corporate till. Any half-competent corporate researcher can find examples of thousands of execs who have mismanaged their company into oblivion and walked away with a magnificent golden parachute. Sometimes those parachutes can be directly attributed to the company's death and that doesn't seem to phase anyone.
No, I think the reason American companies pay such ridiculous salaries for non-performing execs is because we're looking for King George. A paltry 1% of the original citizens of the United States participated in the American Revolution. The overwhelming majority were perfectly happy with taxation without representation and a class system that stifled England into 3rd world status in the next 200 years. A disgusting number of the elite who participated in the creation of the Constitution wanted a government similar to the one the country had just defeated, many of them urged George Washington to become King George Washington. Today, most Americans are doing everything they can to return to the social structure and economic system that killed crushed the life out of Jolly Ole' England.
We're happily and stupidly electing an inherited political system, setting ourselves up for years of inbred Bush family-screw-ups. We've created a class system of upper crust, Ivy League morons who float to the top of almost every corporate institution, in spite of inability and lack of imagination and infected by the age-old ruling-class-total-absence-of-ethical-standards.
Humans are an incredibly simple-minded animal, at the core. We're desperately hoping that there is more to life than . . . life. We want "meaning" to be applied to this painful and degrading existence, but we don't want to work for that significance. We want someone to impart it upon us. Since gods are notoriously absent during times of trial and turbulence, we hope that the gods will speak to "special people": the inherited ruling class. As stupid as that theory is, it's as old as human society. If you can find a single example of a king being anything but a drain on his culture or a queen being anything but a useless figurehead sucking the lifeblood away from the folks who do actual work, I'll be astounded. But I won't be convinced that your one example establishes anything but an incredible example of dumb luck in a single moment in time.
The best companies are more democratic than autocratic. The most successful companies in modern history have a structure that is dramatically more flat that pyramidal, decision and salary-wise. Not that anyone cares. We're more interested in being comfortable than in being productive. Apparently, most of us are more comfortable when we're being ruled by a royal class whose inheritance is decreed by non-existent gods. P.T. Barnum must have been thinking of this trait when he said "there is a sucker born every minute." The only thing wrong with this sentiment, in 2005, is that suckers are born at a much faster rate.