Saturday, January 3, 2009

Holiday Political Discussions Part I - Executive Compensation

The holidays are a time for families to gather. Inevitably (at least in my family), spirited political discussions take place. Here is the Christmas Day "Debate of the Democrats".

A discussion of executive compensation highlighted the wide spectrum of die-hard Democrats in our family, ranging from a self-proclaimed "bleeding-heart liberal" to the socially liberal, fiscally conservative centrist. On the one hand, the out-of-hand compensation packages for CEOs was decried as wrong and a result of the insular world of Board members and CEOs rewarding each other at the expense of shareholders, customers and employees. On the other hand, it was argued that these CEO compensation packages are simply driven by the market and are the result of the negotiation that takes place when attracting and hiring the person determined to be the right person to run a company.

I am somewhere in the middle. I feel that the Democrats tend to demonize corporations and the CEOs that run them. I am an employee of a large corporation. I may be naive, but I believe that the leaders of the company I work for have integrity and are not just out for themselves. Yes, they make a lot of money, but I don't begrudge them that. Compare a CEO who makes $1,000,000 in base salary and their responsibilities to an athlete or movie star and the millions they make. I understand that there will always be the Enrons in the world, and the recent behavior of executives in the financial industry is absolutely despicable, but I just don't think it helps the Democrats to portray all CEOs to be the villains and all corporations as big, bad profit-hungry conglomerates. The fact is, large corporations employ a lot of people in this country, and in today's global economy, the U.S. can't take them for granted.


ElisaC said...

Well, you know I agree that the Democratic Party could send a more welcoming message (and messaging) to entrepreneurs and business people. HOWEVER, I don't think it means that liberals like me think all CEOs are unethical or all corporations evil to say that current executive compensation is NOT actually market-driven, because this "market" has a long history of manipulation and subsidization by (and to benefit) a very small group of people.

ElisaC said...

Hey what happened to part 2?

Cristina said...

Oh yeah! I need to get to that.