D.R.: Why do CEOs make so much? | VailDaily.com
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D.R.: Why do CEOs make so much?

Just read another story about Americas CEOs making obscene amounts of money for whatever it is they do. An Associated Press study found the top dogs of the Standard & Poors 500 brought home an average of $8.3 million a year. Yahoo CEO Terry Semel led the pack last year with $71.7 million. Pretty nice for running a company that runs behind Google.How does CEO pay get so out of whack with a companys performance and the pay for the working stiffs who actually make or break the success of a business? Since when was the head of a company worth 179 times a rank a file workers?Can you imagine the rare company that puts the investment into the workers and not so much the fellow or lady playing golf most days? OK, cheap shot. But a lot of these companies succeed despite the top execs, not because of them. All too often they are so far in space, so far removed from real life in America, that they have almost no clue.Beyond that, few of them truly care about the success of their enterprises. If they did, theyd spread that wealth a lot more, and certainly strategically in bids to improve their work forces at the front lines, where the extra dollars would matter.Costco might come closest. Their CEO, James Sinegal, earns a salary of around $400,000 annually and hasnt had a raise in six years. This still puts him in the richest 1 percent of Americans. And sure, hes got a gazillion in stock options. But his company is famous for paying the rank and file very well, certainly a lot better than Wal-Mart and Home Depot, and they are proud that the top execs are paid less than the yahoos of this world.But all this begs the question, how can this be? The answer is Everest. Why climb it? Because you can. Boards of rich directors think this is the way they attract the best talent. Those lucky few whose fortunes put them in this orbit no doubt believe this themselves, despite the occasional trite speech about recognizing that their teams have lifted them. So this evil little wheel turns on itself, and up it goes. Hey, could you turn down big bucks if offered? Im sure Id believe I was worth it, every million.


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