My Strategy for Reining in Obscene CEO Compensation

Average Fortune 500 CEO Annual Pay Now > $15 Million.  A YEAR.

“A Walmart employee earning the company’s median salary of $19,177 would have to work for more than a thousand years to earn the $22.2 million that Doug McMillon, the company’s chief executive, was awarded in 2017.”

–“Want to Make Money Like a C.E.O.? Work for 275 Years”; The NYT (5/25/2018).

I know how to rein in truly outrageous executive pay — or, at least put the brakes on it.

It’s not through tax reform, better disclosure, or overhauling corporate governance generally (all strategies which have abysmally failed, by the way; average CEO compensation is up more than six-fold(!) in the last 25 years).

No, it’s through semantics.

Turning Public Opinion

My proposal:  instead of business journalists writing that a given CEO was awarded a gazillion dollars, they say that the CEO awarded themselves a gazillion dollars.

Functionally, that’s much closer to the truth.

After all, while exec comp is putatively set by the board of directors . . . who nominates directors?

Who hires the compensation consultants — lavishly paid, unsurprisingly — who advise those boards?

Students who grade their own papers give themselves “A’s.”

CEO’s who effectively set their own pay . . . help themselves to untold riches.



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