Viewers on a recent Washington Journal were asked to offer an opinion about whether executive compensation and retirement packages were simply a private intra-corporate matter or should be subject to some external regulation. A significant number of callers said such decisions were “personal” matters and that an opportunity to “get rich” was an integral part of the American dream.
It is possible that numbers in the millions, billions and trillions have become so commonplace in today’s world of finance that the average person is unable to grasp their enormity and may agree that an executive, who has served his company well, deserves remuneration that provides him with such wealth his persona bears a greater resemblance to a small country than an individual who has worked hard and attained success. Actually, it would be difficult to say that such financially well-endowed retirees worked any harder than millions of average wage-earners, some working two or three jobs to make ends meet.
Astonishingly, companies and other entities have been able to get away with under-funding pension plans for regular folks without having to pay a price either legally or financially. In Connecticut, for example, some retired state employees have seen pensions cut by as much as 20% with no recourse and the fear that their retirement packages may disappear altogether. How is it possible to reconcile enormous payouts in some areas and egregious misappropriation in others? Did the pensioners fail to fulfill the obligations of their employment; did they not negotiate in good faith to effect the original agreements; are they somehow worth less than members of the corporate elite?
Of course not we would, hopefully, say. But what then are we to make of the huge discrepancy between the just-barely-haves and those who have more than enough for several lifetimes? Into the bargain, efforts to eliminate the estate tax so that enormous fortunes can be passed on tax-free to family members forever will result in forcing those in the middle to absorb the financial consequences of government institutions unable to pay their way or provide a fair and just workplace for the great majority of wage earners.
Aside from the inherent inequity of Lee Raymond’s gigantic payout (something in the $400 million range) as he leaves Exxon after what is being called his “long and distinguished career” take a look sometime at the kinds of salaries and bonuses top execs at large corporations receive. Whether or not their parent organizations do well, the stock goes up or down, these principals take home huge salaries and enjoy benefits not available to the average worker. Even when companies do well and stock prices rise, executive compensation is way out of line. According to the NY Times Business Section, Sunday, 4/9/06, “In 2004 the top ten percent of executives earned at least 350 times the average worker’s pay, up from 122 times in 1990 and 74 times in 1950.”
And consider – – outsourcing not only boosts profit margins but also relieves businesses of having to provide benefits. One employee told me that work sent abroad from her corporate headquarters, while not incorrect, had to be completely re-formatted when returned – – a practice nonetheless endorsed by management because they avoided having to pay health and retirement benefits to American employees. Many corporations also under-fund pension plans and then cry poverty when it comes time to meet those obligations.
Perhaps external pressure might induce corporations to curtail unrestrained salaries and retirement packages, and perhaps legal measures could work to close the enormous gap between executive pay and that of the average worker. In addition, it would seem only fair that final cleanup operations with respect to the Valdez mess be completed even if it were determined that the funds required to complete this task might reduce Mr. Raymond’s retirement package.
Lee Raymond certainly isn’t the only executive to receive an obscene retirement package; he’s just the current poster boy. But, if outrageous executive salaries and retirement packages are to be condoned, corporations should be required to meet rank-and-file obligations, clean up the messes they create and not receive governmental subsidies to conduct their business. Otherwise ordinary taxpayers end up once again lining the pockets of the rich.

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