Who's Watching the Watchmen?
In Japan, the average CEO makes ten times what the average worker does. In the US, that multiple is 500 times, according to a recent survey by Towers Perrin. This while unions are being hamstrung and both wages and working conditions are going down the shitter. That's up considerably from 1980, when the average CEO was making only 40 times as much as the average worker.
So how, exactly, is this situation perpetuated? Well, the problem seems to lie with inadequate oversight by boards of directors -- this according to corporate reform expert Ira Millstein, who says "I don't know how you can set a cap on pay -- you can't legislate this one."
Suggestion to Mr. Millstein -- maybe you should be pimping the recommendation of the SEC, who believe that there is a horrible conflict of interest at work in any public company when the CEO is also the Chairman of the Board? Their recommendation, after analyzing the corporate fraud scandals of the late 90's, was that the jobs should be separate (and in Europe, they usually are). As long as the body setting the pay of the CEO is also headed by the same guy, they feel there is no inherent system of checks and balances to empower the board to act in the interests of the stockholders. And I'd love to hear a good argument why it's in the stockholders interests for American CEOs to be making 50 times that of their Japanese counterparts.
Of course, as everyone noted at the time, there isn't a snowball's chance in hell of the SEC's recommendation actually being adopted. You certainly can't say corporate America hasn't gotten its money's worth out of GWB...
(Much thanks to Phoenix Woman and her excellent new blog, Mercury Rising. I highly recommend checking her out, she's got lots of good news and analysis.)
posted by Jane Hamsher @ 1/16/2005 12:00:00 AM
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