CEO’s Demand Pay Caps for Celebs

HollywoodCEOIf I was a CEO with so many people carrying pitchforks and wailing to the government to control CEO pay, I would grab my own pitchfork and walk to the White House demanding that the salaries of Hollywood movie stars, sports figures and media stars immediately be capped and controlled by a government oversight committee.

In 2004, the top ten corporate executives each made an average of $59 million while the top ten celebrities each made $119 million, twice as much.  Yet where are the pitchforks for the celebrities?

This example shows you how Americans think.  We have been brainwashed to associate CEO’s with greed, power and corruption while clearly anyone who does a decent job at pretending to be someone else or lets a company use their likeness on a box of perfume can make however much they want.

That is a major disconnect.

CEO’s, no matter how greedy they may be, are ultimately paid whatever stockholders and the board of directors think they are worth.  They may not live up to the expectations of either, but in making an offer to an individual, the amount is reflective of the expectation.  $59 million may not be much to ask when the individual is capable of reducing costs 10% and saving a company $100 million a year.

I’ll never understand why Americans are so quick to judge how much a CEO makes in a free-market system where their survival is based on their performance, experience and business acumen, but think $120 million a year for the Paris Hiltons of the world is reasonable.

Think about it.

Date sourced from Economic Facts & Fallacies by Thomas Sowell



Categories: Government Failures

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