Posted by
voice_of_reason on Wednesday, February 28, 2007 8:54:01 PM
The business world is getting more complex and competitive, and it takes a lot to be successful, or even to maintain an existing company.
Try to start a business (any business), and you will understand.
A simple analogy - since there are a lot more channels for entertainment these days, the landscape is more competitive. Not surprisingly, the actors and producers of hit TV shows and movies make a lot more money than entertainers of the 60s, 70s and 80s. We still pay about the same money for a record (notwithstanding the digital format), but avg recording contracts for performers are at least 50-100x higher than two decades ago.
BTW, it has ALWAYS been difficult for people who start and run successful companies (I speak from personal experience on both counts).
* It doesn't just take 'book smarts', although a good education doesn't hurt!
* It takes a level of self-confidence that is a rare commodity
* It requires a strength of mind to make a string of correct decisions without any fore-knowledge of success. This is something that the MBA case-studies never reveal, because they have the luxury of hindsight, which makes everything so patently obvious to the reader who might say "Hey, that looks easy, anyone could do it!".
So, yes, capable CEOs who can guide their companies towards revenue growth and profitability are in EXTREMELY short supply. And, if you attempt to regulate their compensation pkgs, you will hurt the 'workers' a lot more than the CEOs.
Consider these issues that either didn't exist, or were relatively minor matters:
* global competition
* compliance issues: e.g. S-Ox
* hostile media
* jaundiced public opinion
The reality is that there are an infinitesimally small number of capable, productive, self-starter types in any society (even in America). And it is on their shoulders that we all stand, while feeling 10ft tall.
If you found a way to curb Bill Gates' ability to make money, he would probably hit the 'permissible' cap that you would place on his personal wealth - say, $200M instead of $34B. The loss to all those who benefit from his generosity (and I'm not talking about his philanthrophic 'giveaways') would far exceed $33B. His lifestyle would only be minimally impacted - but his customers, employees and vendors would be hurt.
So, you would be smart to 'permit' Bill Gates to earn his $34B, or more. To paraphrase a philosopher (any guesses?) whose words are often forgotten, "When you take away the shirt off an industrialist's back, you are actually giving up your own!"