Bailing Out Excessive Greed
I’ve read dozens of articles lately about the proposed Congressional bailout of the Big Three auto makers. In each of the articles, the inevitable diatribe against auto unions and overpaid auto workers comprises the bulk of the word count. What is conveniently absent from all of these “how-to-save-Detroit” discussions is grossly excessive CEO pay.
Here’s some food for thought.
The average “overpaid” auto worker earns approximately $40 per hour.
By comparison, the average school teacher earns approximately $20-$25 per hour for anywhere up to 20 years of experience.
Now, let’s talk about CEO compensation for two of the three Big Three auto makers in the 2007 tax year. The CEO of GM earned $17million, while the CEO of Ford was paid the pitiful sum of $21million.
Considering there are approximately 2,080 “work hours” in a year, this means that the GM CEO was paid $8,000 per hour and the Ford CEO earned $10,000 per hour.
Even if the absurdly “inflated” hourly rate of $70/hr is use to argue that the average auto worker is overpaid ... How do you then argue that a CEO (especially one who runs his company into the ground) deserves to be paid $7,960 per hour more than the employee who actually builds the product?
I’m under no illusions that the CEO’s would suffer any consequences whatsoever if they lost their jobs tomorrow. No jail time. No community service. No debts to repay. Just a Golden Parachute worth many many millions of dollars and a private jet waiting to whisk them away to St. Bart’s. But, a bankruptcy of any of the Big Three auto makers would devastate our already teetering economy. The ripple effect of a bankruptcy would demolish auto workers, parts suppliers, auto service workers, and every manufacturer associated with any one of the Big Three.
When will management be held accountable for their failures? ... Whether in government or corporate America?
As a side note: It is time for limits on compensation to be imposed on CEO’s, executives, doctors, lawyers, and “societally-useless” entertainers and athletes.
It’s not surprising that people in positions of corporate power seem to be able to get away with anything these days. It is a little know fact that large corporations are regularly being fined millions of dollars for their continuing abuse of the law, but all the news will tell you about is knife and gun crimes in the inner city. I don’t envisage anything changing under Barrack Obama either.
Check this out Paul;
I agree we need to bring down compensation and bring up average wages for all.