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Friday, September 28, 2007

Big Salaries

Big Salaries

From time to time you and I hear lots of complaining in the news media about the excessive compensation paid to presidents and officers of major corporations, especially publicly held corporations. I always chuckle when I hear such complaints, especially because the media never remarks negatively about the excessive compensation of professional athletes, or of Hollywood stars, or of Rock stars.

There are plenty of things to criticize the management of large public corporations for, such as manipulating the stock value to the benefit of management instead of the stockholders. But, as a stockholder I don’t object to huge pay for a corporate leader that performs. If he does a wonderful job providing better services or products and the stock soars, why should I complain about his compensation? Furthermore, what business is it of non stockholders? A stockholder has options. He can get rid of the stock if he thinks the compensation being paid to the president of the corporation is excessive. No one is holding a gun to his head. He can attend the stockholders’ annual meeting and raise a rumpus about compensation if he is concerned.

Complaining about big salaries is just the politics of envy. It’s not right. It’s not healthy. In fact, the Bible calls envy a sin. If we can cheer on baseball players that make more than $10 million a year, then let’s also cheer those high paid business executives that year in and year out, run companies that give their investors a healthy return on their investment. It’s fun to see your favorite star hit a home run, but it’s even better to see a business star make your stock value rise.

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