CEO Greed: A History Lesson

The lesson comes from the MSNBC website, which details the steps taken to check excessive compensation and the steps taken to get around the regulations. The author also weighs the difficulty of bringing the practice under control, and seems to shrug before the power of the market. In the global economy, she writes, the "top talent" in the field will simply leave the country for better deals abroad if we try to limit their pay. Of course, this begs the question of how important, really, CEOs are for any company's performance. They've been elevated into a superstar class without the usual celebrity, and are able to negotiate favorable contracts with stock options, signing bonuses and other enticements, in a competitive environment comparable to professional sports. Perhaps the CEOs have agents, too.

Since we're dealing with corporations, the issue is between CEOs and boards of directors, on one side and shareholders on the other. The last are the aggrieved party, but seem to have a hard time keeping CEO compensation under control. Shareholders are also citizens, of course, and since corporations depend upon the state for their existence, shareholders have citizens' right to demand more effective laws protecting their interests from boardroom greed. Efforts have been made, and have failed, but are all our options exhausted? The issue has something to do with the current crisis because CEOs have perverse incentives to inflate stock values beyond a company's true worth. If someone tries to tell us that we can't have "the market" without all these loopholes that put personal greed before productivity, then maybe we should do without "the market" and come up with an alternative that works in the actual public interest.