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Will politics force down excessive CEO pay?

Posted on April 13th, 2014 at 5:19 by Sueyourdeveloper in category: News -- Write a comment

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CEOs make easy targets for politicians eager to be seen as populist champions. Last year, average total compensation for Canada’s 100 highest-paid corporate CEOs was $7.9 million. That’s 171 times more than the average pay of their workforces. (The U.S. figure is 354 times. In Britain it is 133 times.)

Fairness and common sense dictate that no man or woman is “worth” 171 times the value of those in the front lines, where the day-to-day work gets done.

Nor is it explainable that in the 1980s, when Nortel Networks Corp. was pioneering the fibre optics that are the backbone of today’s Internet and Magna International Inc. was placing the bets that would make it the world’s third-largest auto-parts maker, the pay ratio was about 20 to 1.

Have CEOs become 151 times smarter since then? Consider the tragedies of Lac Megantic and the oil-spill catastrophe wrought by BP PLC in the Gulf of Mexico, the implosion of Wall Street that triggered the Great Recession or the demise of Nortel through chronic incompetence and the answer is obvious.

This is cartel-like behaviour by a class of executives, in my opinion.

  1. It’s not like the front line workers would earn more if the CEO salary were lowered. Instead, there’d be more profit.

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