Saturday, September 02, 2006

How executive compensation committees work

Executive compensation committee meetings are sophisticated, complex, and orderly processions made up of rational, logical, and thoughtful business leaders. But, oftentimes, in conducting these reviews, and in the spirit of "our CEO is better than your CEO," things don't turn out as they should.

It is a mathematical impossibility for all CEOs to be better than average. Thus, CEO pay has skyrocketed in past years. Where once, CEOs were paid 40 times the average employee salary, it is now over 400 times. This is seriously RIDICULOUS.

Just as sports salaries have broken through the ozone, so, too, have executive salaries. When will it stop? Most likely not until there is a major calamity where guys start jumping out of buildings again. Which may not be too far around the corner, with the political landscape the way it is, the global war on terror, and the general suckiness of the business climate.

I don't know too many people who are wildly optimistic about the economy, do you? And this apathy breeds real results. As the collective psyche goes, so, too, goes the economy, for economics is merely the study of mass psychology put in terms of supply, demand, and prices.