I was talking to friend yesterday about the Home Depot CEO who is walking away with $210 million (most of which was agreed upon before he resigned). An article in New York Magazine pointed out a possible solution, which I think is a great idea:
We could enact de facto compensation caps for top executives, either by limiting the tax deductibility of CEO pay or, as in Britain, by making CEO pay subject to a shareholder vote every year.
Actually, the entire article is pretty good.
…during the past two decades weâ€™ve not only let economic uncertainty and unfairness grow to grotesque extremes, weâ€™ve also inured ourselves to the spectacle. As America has become a lot more like Pottersville than Bedford Falls, those of us closer to the top of the heap have shrugged and moved on.
The asymmetry between the Goldman bossâ€™s compensation and that of his average employeeâ€”85 times as bigâ€”is virtually Ben-and-Jerryâ€™s-like these days: An average CEO now gets paid several hundred times the salary of his average worker, a gap thatâ€™s an order of magnitude larger than it was in the seventies. In Japan, the ratio is just 11-to-1, and in Britain 22-to-1.
This is not the America in which we grew up.
Where’s George Bailey when we need him?