DOUG MACEACHERN

CEO salaries out of control? Don't just stand there, do nothing!

Doug MacEachern
columnist | azcentral.com
Stock, smug executive posing with cigar: is he REALLY worth 350 times what you make?

Nothing speaks to the liberal passion for exerting control like its obsession with CEO pay.

It seems like an issue that should be entirely up to company boards and stockholders, doesn't it? Yet we get a continuous flood of this and this and this and this and this. We all whine about it, in fact. Even I do. But, short of the feds stepping in and assigning salary limits, there's not much to be done.

I mean, we can stipulate just about everything about the wrongness of American CEO pay, as far as I'm concerned. At an estimated 350 times what the average corporate employer takes home, it's just obscene. Astronomical CEO pay may contribute to the stagnation of what workers get paid (although I'm dubious about this one).

Probably the worst economic inefficiency built into insane CEO pay is the incentives it creates for CEOs to maneuver their companies for short-term, windfall-style financial gain as opposed to creating long-term health.

But even so, what's to be done about it?

Progressives never had a better opportunity to assert control of CEO pay than with their Dodd-Frank financial regulatory bill that followed the Great Recession. But all Dodd-Frank does is enforce a pair of intensely paperwork-heavy reporting requirements through the Securities and Exchange Commission.

So, that leaves whining about it. A liberal economic policy think tank just published a study that purports to find CEOs make 300 times what an average worker makes. But in the context of some other analysis that finds CEOs make 350 times the average worker salary, it almost sounds like a defense of the status quo.

Well, there are two take-aways from this latest study.

One is that it is the product of a think tank whose research almost always finds that public-sector unionized workers are underpaid and that no minimum-wage hike, no matter how high, is ever harmful in any way. That is because the Economic Policy Institute is a progressive-oriented bunch, funded by unions and liberal foundations. The EPI would never conclude CEO pay is anything less than a threat to the future of the Republic.

The other take-away?

Take a look at the Wall Street Journal's blog reporting on the EPI study. It includes a graph that shows the trajectory of CEO salaries. As the graphic indicates, the astronomical rises of CEO compensation really took off during the Bill Clinton years, which corresponds with the tech revolution that brought us CEO-gurus like Bill Gates and Steve Jobs -- guys who made crazy fortunes from start-ups, the very kind of CEOs we have come to idolize.

That graphic strikes me as good evidence that the Clinton Years, and not this guy's age, should truly be ID'd as The Decade of Greed.