It's funny where ethical discussions crop up. This excerpt below is actually from the Tuesday-morning Quarterback article at ESPN.com. Regardless of who raises this question, for quite some time I've wrestled over the utterly massive salaries and compensation packages given to big business CEO's in this country. This is just the latest in countless similiar stories that boggle the mind. The question raised by this author is a good one: is this really any different than stealing in any significant way?
"New Record for CEO Gluttony: Last week William McGuire, CEO of insurer UnitedHealth and a centerpiece of the latest corporate-boardroom scandal (backdated stock options) agreed to leave the company. The Wall Street Journal estimated that for his 14 years running UnitedHealth, McGuire pocketed a total of about $1.6 billion. That's $457,000 per day, or $57,000 per working hour. So McGuire paid himself more per hour than the median American annual household income. And this was during a period when UnitedHealth was cutting benefits to those it insures, cutting benefits received by its own workers, and cutting payments to physicians and hospitals for health care. Obviously this greedy little man is beyond disgrace: To experience disgrace, one must have a conscience. But why isn't McGuire's $1.6 billion simply considered theft from shareholders? UnitedHealth is a public company, and there is no possibility the fantastic amount was justified by market forces -- that is, that the UnitedHealth board could not have found a similarly qualified CEO for less than $1.6 billion."
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2 comments:
The Board of Directors hired the CEO to do the job upon agreed terms. Shareholders must have done well for themselves too because the CEO was there for 14 years. Also, shareholders are always asking for increasing returns so premiums must rise. Premiums have risen over the last 14 years because baby boomers are retiring. With old age comes more health care costs. CEOs need the stock based compensation because it directly reflects how much of a stake they have in the company for it to succeed. If the CEO does not have a specific interest in the company, it will go nowhere. I'd rather give one person $1.6 billion over 14 years who can turn around a company than have my shares in a company stagnant. Maybe we should all be CEOs, then we would stop complaining, but it takes special people and their leadership to manage large companies.
Well I would consider it possible for a CEO to decide his own salary. True if he is doing a good job with the company he should get paid a lot. However, when a company is having to cut much of its programs, I would say the CEO is not doing his job to the fullest.
I do not agree that someone should always pay people whatever they want. I am for capitalism, but if a huge company were to go to a place of relative poverty to the U.S. and pay people crumbs for what Americans are making, then yes i would say it is exploitation. The company is sustaining the poverty in the region and making a profit.
To conclude, i don't think the shareholders were thinking the CEO was doing that good with the company to be making 57,00 an hour.
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