I again have to take issue with a liberally slanted editorial Viewpoint [“Are highly paid execs globally competitive,” Aug. 29, Page 6]. I know the salary survey is an annual event with Plastics News. It's always an occasion to take up the populist cry that there is somewhere an equitable ratio between what workers are paid and what executives are paid. Where does this apples and oranges comparison come from?
First of all, the only salaries you can get access to are the salaries and bonuses of the executives in public companies. In the U.S. plastics industry in particular, many of the firms are private and do not weigh in your statistics at all. In many private companies, CEOs are also owners and they get their compensation by building value in the businesses they run. If there is a payoff it is if and when the business is sold. In the rest of the developed world the classic entrepreneur is a rare bird. People from Europe and Asia come here if they want to start or own a business.
The question you pose about outsourcing executives panders to the people who have lost jobs to foreign competition and are looking for someone to blame. Who better than the fat cat executives? On the one hand, running any company, public especially, with Sarbanes Oxley, SEC rules, aggressive Spitzer types on the prowl, is a harrowing job. The degree of state and federal regulation is a burden many of us would gladly give up and take a pay cut in trade. Many of our foreign competitors do not have to deal with the layers of rules we have in this country. With your focus on salary disparities, you seem to be lobbying for some type of rule that limits compensation multiples. This is an old liberal position that goes back to Jimmy Carter. Comparable worth theories are all looney left ideas.
On the other hand, we have quite a few outsourced executives. Name another country with more foreign-born CEOs.
The statistics for compensation in other countries is very hard to believe. Most do not show everything as we do in annual reports. Europeans are not taxed on income earned outside the home countries, and perks are abundant. Japan spends more on business entertainment than defense.
Finally, you take a swipe at the Bush administration for “unsustainable tax cuts” and the pursuit of the Iraq war instead of “keeping its eye on that ball.” What do these political issues have to do with executive compensation? What ball are they supposed to be eyeing? Gas price controls? The Feds have thankfully nothing to say about how much we pay anyone for anything except the minimum wage. Let's keep it that way.
What executives are paid is the business of the owners of their company. Fair is what they need to attract talent and keep it in this very competitive world. Why not look at the relative job creation of the major world economies in the last three to five years and see who is earning their salaries.
John P. Dellevigne
HPG International Inc.