Neff Zone Column

Print edition: July 8, 2006

RANT 1: RIDICULOUS CEO PAY

I know you’ve just about "had it." You’re disgusted, exasperated, discombobulated and otherwise at the end of your rope. You’re an average working person and you’re getting really tired of getting stabbed in the back, hit on the noggin and slapped in the face by the "powers that be" almost every single day. It’s one ridiculous thing after another.

I know you feel this way because you stop me on the street, e-mail me, and send me things via postal mail. "Keep hammering," you say, "because someone has to publicly say what we’re thinking. If things don’t change soon we’re all going down the tubes."

Well, and here’s a news flash, I feel the same way. That’s why over the next few columns I’m going to rant a bit. And if it rankles a few feathers, so be it. If nothing else, at the end some of us will at least feel a bit better because we will have gotten some things off our collective chests. Stick with me, though, because when the dust settles I’m going to tell you how to fight back. So buckle your helmet straps and lock your table trays in the upright position; there may be turbulence ahead. Here we go.

I read this week that the average pay rate for CEO’s of American companies is now 262 times more than the average worker’s pay. Now, I realize that heads of companies usually make more that the people on the assembly line, but in 1965 the difference was 24 times more and in 1995 it was 100 times more. Now it’s 262 times more?

It gets better. In 2003, forty-six CEO’s of major companies paid no income tax. The CEO’s of the fifty firms that outsourced the most American jobs overseas averaged 34% more pay than their CEO peers, a bonus for giving your job to a third-world (in all reality) slave. And the CEO’s of companies that sponsored the last Democratic and Republican national conventions received 41% above the average CEO’s pay, which is bit like tipping a pizza delivery guy for delivering a hot pie to your front door.

While all this is happening, do you know what the CEO’s are doing with all that cash? According to USA Today, one of the biggest CEO personal expenditures is paying a nanny to raise the children of said CEO. The going rate for an acceptable nanny is anywhere from $650-$1000+ per week (some nannies charge up to $450 per day), plus a paid vacation, personal vehicle, health insurance, membership to a gym or country club, and unlimited credit card accounts for clothing and incidentals. Got to have the right nanny. It’s a CEO status thing.

Meanwhile back in the real world, here’s what you get. Since 1998, American CEO pay has risen 442% while American worker pay has increased 1.6%. So basically, you get no raise. You get your benefits cut, your pension stolen, and your job security rights voided. Even your lunch hour is not really an hour. According to a recent survey, around two-thirds of American workers get less than thirty minutes for their lunch "hour" and almost 60% eat while continuing to working. The latest insult is the CEO’s are lobbying politicians to take away your overtime pay. So, now you’ll not only get to work through your lunch hour, you’ll be able to work later without extra compensation. You have to "earn" that whopping 1.6%, you know, it won’t just fall in your lap.

Ah, the CEO’s say, but it’s a global economy. American workers have to compete with workers in other countries, so they’ll have to learn to live with pay cuts and no health care. And, heaven forbid, if workers think unionizing to negotiate fair pay, benefits and working conditions will do anything but lead to ruination they are dead wrong. Unions bad; globalization good.

OK, if cutting pay and benefits to make American companies more "globally competitive" is such a great idea, explain this. Why don’t American CEO’s cut their pay levels to that of their counterparts in other countries? While American CEO’s make 242 times more than American workers, here’s how much more than their workers CEO’s are paid in the countries of our competitors: Mexico – 45 times more, Britain – 25 times more, Canada – 23 times more, Germany – 13 times more, Japan - 10 times more.

As far as the union thing goes, there is obviously no stronger union on earth that the de facto CEO Union. These people operate in a closed society that presumes that if you can CEO one company it stands to reason that you can CEO any other company, after all you’re a CEO. It’s obvious because you belong to the CEO country club, attend the CEO cocktail parties, and vacation at the CEO ski resort in the Alps.

This inbreeding is why you see ridiculous scenarios like the CEO of a toothpaste company suddenly becoming the head of an airline, even though the skill sets are obviously different. Then when the toothpaste guy bankrupts the airline he gets hired to CEO a television network. How can this happen? CEO Union people only hire other CEO Union people.

These are the "leaders" of American business and I don’t know about you but I’ve had enough of them. The way they are acting just isn’t right. This era of exorbitant CEO excess is all tied into the politicians of today. Next week, Rant 2 will deal with those birds (actually it might take a couple of rants). Whew, I feel better already. You too?

Jim Neff is a local columnist. Comments to neffzone@gmail.com. Read Neff Zone columns online at www.neffzone.com/cadillacnews.