January 25, 2005

This is supposed to bother me, but it doesn't

We're supposed to get all exercised about "executive greed", right? You know, CEO-types who are already making high six-figure to low seven-figure salaries getting multi-million dollar "bonuses". Bad, bad CEO. Right?

This doesn't bother me nearly as much as it's supposed to. I mean, as long as the company is moderately profitable - so no Enron or WorldCom situations - executive bonuses are just a great way for corporations to reduce their tax burden. I mean, if it didn't go to the CEO, it'd probably be posted as profit, which means corporate taxes - which are obscene - kick in. So by "overpaying" executives, we're really just keeping more money out in the economy where it can do some good instead of having it vanish into the government coffers. I mean, come on: if you got a cool extra million you'd spend a good bit of it. Taxes are to an economy what friction is to physics: it is necessary for certain processes to work, but overall, just makes everything more expensive and less efficient.

So go ahead: "overpay" those CEO types. Increase the efficiency of the economy.

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Posted by ryan at January 25, 2005 07:55 AM | TrackBack
Comments

Yeah, like our S.S. Crisis. What bothers me are the Dems -and Repubs- crying about privatization. it just means less money for them to run their fingers through, less $$$ for Gov't Pork, and will actually make capitol hill think more cosely about how they spend the money in front of them.

Posted by: jCave at January 25, 2005 08:55 AM

of course, it'd be just as cool to roll the benefits out to any number of people in the organization, or a bazillion and one other places which would avoid the same tax problem.

I don't think there's anything wrong with giving CEO's a big bonus, don't misunderstand me there, I do understand though why some mid-level lacky in a major corporation who watches his friends and buddies get crapped on day in and day out in the dehumanizing BS of corporate america would feel a little frustrated by it all. "Just last week you fired my good friend who was the most qualified person on this floor in the name of 'budget cuts' but you just gave yourself 3 million bucks?"

That kinda stuff. Of course, finding the moral imperative in all that is a little difficult, nay near impossible.

Posted by: JosiahQ at January 25, 2005 09:29 AM

I'm not trying to say that it looks good, but face it: the 95% of the population that isn't engaged in business - real business, mind you, not mid-level flunky type workers-as-interchangable-parts stuff that most people do - really has no idea about how these things work. I'm only starting to myself, as I read up on corporate structure and law.

But even though $3 million sounds like a lot of money on an individual level, on a corporate level it's small potatoes, and on a national level you wouldn't even notice. $3 million distributed amongst 10,000 employees gives, what, $300 each. That's 15 cents an hour, assumming 40 hours a week. Yay. Pay $100 of that in taxes, and you're left with an extra $200 bucks. It only feels bad because people don't understand how money really works.

There's a reason that some people are CEOs and other people aren't. CEOs give orders, other people follow them. CEOs set policy, other people implement it. When it comes down to it, if the CEO's policy doesn't make sense to you, it doesn't really matter. You aren't being paid for things to make sense to you. You're a worker, not an owner. Suck it up.

Posted by: ryan at January 25, 2005 12:11 PM

Ryan, I am an owner, and I make the decisions, not sure why I should suck it up. Perhaps you're preaching to someone else.

Why not kick out $3 mill in incentives to folks who perform well, or something like that. A whole lotta big corps don't do stuff with that. Talk to some folks in corporations, listen to their stories about bloat and wasted time. Alot, ALOT could be done with organization and focused funding. It's something I've very much got in mind with *my* business.

Still, one could always theoretically propose a bazillion and one betters ways $3 million can be spent. But hindsight and all that, and again, I'm not suggesting its immoral for them to score a sweet $3 million in schwag, but I'm also not so naive as to think human nature is such that these folks ARE spending the money in best way possible. Nor should you be.

Posted by: JosiahQ at January 25, 2005 06:07 PM

That rant was more directed in the abstract, as you're probably one of the only people who reads this space who owns even part of their own company.

I have no illusions that the money is being spent in the best way possible (I'm a big fan of corporate charity, and disappointed that it happens as rarely as it does), I'm just happy that they're spending it instead of having it be lost to taxation. And there really is the expectation of executive positions paying well, so the whole attracting and preserving talent argument is pretty valid.

Posted by: ryan at January 25, 2005 09:59 PM
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