LOOTING THE PUBLIC CORPORATION

The topic pops up periodically.  As one observer recently phrased it: “Exorbitant pay of top corporate officers is unfair to America.”  Prominent journalist Margo Roosevelt just provided some excellent examples.  Disney CEO Robert Iger was paid $46 million in 2014; Leslie Moonves, CBS Corp. CEO received $57 million; Discovery Communications CEO David Zaslav netted $157 million in 2015.  Marissa Mayer, Yahoo CEO, $42 million.  The list goes on.

So what should be done to invoke fairness into the compensation of corporate executives?  Perhaps a more appropriate question would be: Why should something be done at all?  Who, exactly, are the losers in what is nothing more than an established charade by which vested insiders systematically skim the assets of public corporations?  Most certainly, neither the general public nor governmental agencies are directly affected. The only losers are those who choose to invest in the affected companies, for it’s from the pockets of those stockholders that the unconscionable sums flow.  And inasmuch as owning shares in a company is essentially voluntary, the victims are free to escape whenever they choose.

What’s behind the move to chop executive remuneration?  It’s the usual motive: The realization that certain persons, who may be presumed to be undeserving, have levered themselves into favored positions from which they receive far more income than the rest of us.  In short, pure envy.

Let me share my bias with you.  I believe that all upper tier corporate executives, regardless of the titles they hold, the positions they occupy or the nature of the firms in which they’re employed, are fully interchangeable.  With few exceptions, their foremost expertise is in not rocking the boat.  To a man—as well as to a woman—they adhere to the dictum that to get along, they must go along.  Accordingly, their concept of a successful company is one which continues to function profitably enough so they may distribute handsome favors to themselves into perpetuity.

This then gets us to the essence of the public corporation.   I contend that the principal reason they exist is so their officers and directors can extract benefits from them.

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