CEO Salaries and Economics
One of Barack Obama's standard lines is about how CEOs make more in 10 minutes than most people make in a year. Well, so do some athletic coaches and entertainers.
As a student of Jim Rohn, I am a believer that the money you earn is a reflection of the value you bring to the marketplace. The more difficult it is to do what you do and the more value that society has for what you do, the more you will be paid.
I also believe we have a free market economy based on greed and greed must be regulated or abuses will occur.
When I blend those two precepts, I think these thoughts.
I do not believe government should try to set salaries. What it should do is enable the stockholders of companies to have more input into what its CEOs and other executives are paid.
Think of it this way using some random numbers that occurred to me. Let’s say a CEO is paid $168 Million a year. That’s a tidy sum. Let’s also say the stockholders number 50,000. What if those stockholders reduce the CEO’s salary by $28 Million to $140 Million? Doesn’t that just increase the profitability of the corporation by $28 Million? Couldn’t that $28 Million be converted into dividends for the stockholders? If those dividends are reinvested, doesn’t that make the corporation stronger? If those dividends are cashed and spent in the economy, then isn’t the economy stimulated on a wide basis? Wouldn’t that dividend ($560, by my calculations) be even better as a stimulus than our government borrowing money it doesn’t have to provide almost the same amount of money?
The answers to my questions are “Yes”, aren’t they?
Granted, you have to make sure you pay enough to attract the leadership you need to your company. Just ask the alumni of the major colleges and universities about their football and basketball coaches. I’m just saying you have to have a balance. Right now I’m not sure that balance exists.





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