Gus,
Yes, I know compensation "consultants" (more like compensation "sophist" hired guns (i.e., the CEO says, I want to make $100 billion, you find a way to rationalize it, with an implied, you'll get your 5% cut) point to increases in market cap as a rationale for outlandish salaries as if it makes sense. But considering that studies show that most increases in market cap are due to bull markets not to company specific events or management brilliance, these arguments are ingenuous at best. And further considering that when the market cap goes down the executives rarely give any of their previous gains back, or even suffer much of a penalty (unless you consider "only" making a couple of million instead of tens of millions a penalty), the arguments become specious. Sure they occasionally get "fired", but so do workers who make far far less, and have far far less of a cushion to fall back on in hard times (not even considering the obscene golden parachutes that the execs get so that their precious "egos" can heal).
We seem to have totally lost sight of the fact that the first $30-40,000 are the most important dollars that anyone earns. And beyond some number that is hard at best to calculate in either inflationary times or in times like this of a housing bubble for expensive show-case mansions, each dollar becomes increasingly less important except for prestige reasons. Prestige dollars, in a sensibly organized society, should pale next to necessity dollars, IMHO.
Sam |
