HERE'S WHAT READERS ARE SAYING:

My answer: It is greedy, immoral, selfish, arrogant, and very unfair to the employees

who are most likely being paid much less than they are worth to the company!

Bernie Dalby
Madison, WI

I agree! CEO's are paid excessively and it's nothing but pure greed.
I have never had a problem with risk/reward. And when the owner of a
privately held company makes a bundle; good for them. That person has
their fortune, their energy, talent and family life fully invested in
that company; and indeed is usually are the founder. When they make a
mistake or other fortunes go against them; no one is there to bail them
out and they can lose it all.

The hired CEO on the other hand has virtually nothing at all invested in
the company. Nothing. They didn't build it, they didn't grow it! All
they need to do in some cases is keep the gas pedal down. Don't mess it
up! And that's not worth millions of dollars a year. If things go
poorly, they leave and take their severance with them. They are
entitled to fair compensation, the authority required and perks. After
all, we hired them to succeed. This is perhaps a little bit simplistic;
but not that far off the mark.

If they do indeed grow the company significantly; then perhaps a bonus.
After all, the stock holders hired them to do just that. If they want
to quit; good-bye. Big big money is warranted for extraordinary, unique
performances and is paid after the fact in the form of a bonus. It's
often a one time event.

I would also like to see more true ownership on the part of CEO's and
board members. This 100 share buy in is a joke. I want them to share
the pain with me and I'm certainly not going to give them a raise or
bonus for a sub-standard year. They can blame other factors or
departments all they want; but they were in charge! Deal with it. The
owner of the privately held company just might have had to go without
some paychecks!

Gari Berliot
Madison, WI
Wisconsin State Journaly

The “proper” price for anything whether it is personal service (wages), widgets (the price), money (the interest), is the intersection of the supply and demand curves given a willing buyer and willing seller with knowledge of all material facts. Anything else, if willingly done by the participants (as Mikelsons) is silly (he is giving away money to shareholders) or if not willingly engaged in is theft (rent control, price ceilings, anti-gouging statues, usury laws, etc.).

While CEO pay may look exorbitant and makes a good sound bite, due to the declining marginal utility of wealth it is frequently necessary to pay what appear to be outrageous sums to attract the services (the marginal utility curve is widely considered to be a log function). In addition, it may be a good purchase. For example, suppose when Jack Welch ran GE his retirement would have caused the stock to decline by a nickel (I would submit it would be FAR larger, but hard to isolate in a market with lots of other “noise”). There are currently over 10 BILLION shares of GE trading. $10,000,000,000 times $.05 = $500,000,000 or $500 MILLION dollars. Anything short of that “cost” is a deal for the shareholders, regardless of how obscene it may look.

David E. Hultstrom, MBA, CFP
Richmond, VA
Richmond Times-Dispatch

I think it is immoral for a CEO to demand a huge salary when he continually makes budget cuts and layoffs to keep the company afloat. A company goes into bankruptcy and all the employees are thrown out of work while the CEO, who is responsible for the most part, keeps his big salary, benefits, etc. and moves to another company to repeat the same action. He should be held responsible for his company's success or failure and also be rewarded, or suffer with the employees he hires. It usually is not the employee who is responsible for the failure of the company, but the leadership. Many employees take pay cuts, work many, many unpaid hours, and deprive themselves of much needed vacations and other amenities, to see their company thrive. I have experienced and observed this throughout the years.

Geraldine Barrick
Stanton, CA
Orange County Register

Sir,

Thank you for offering your Readers the opportunity to respond on the above mentioned topic.When a CEO demands an extra ordinary salary package,as it was shown in your column of last Saturday(June 5th) in the London Free Press(London,Ontario,Canada),which shows the total of $200,000,000. IS immoral-obscene-unrealistic and simply unbelievable.
Competent CEO's are worth an attractive salary package,but not in high excesses.It depends on the size of the business/corporation,etc. but under no condition should a CEO demand an unrealistic high salary package when the Company he would lead is loosing money.
An interesting example was Mr.Lee Iacocca,the previous CEO of Chrysler,before it was taken over by Daimler,who would be paid a symbolic $1.00(US) for his first at the helm of a financially struggling Chrysler Corporation. Thanks to the "K Cars",the financial picture of Chrysler improved,the Company prospered and Mr.Lee was properly compensated.
There has been a considerable outcry about the overly generous salaries of CEO's and it is to be hoped that in another two or three years,that whole routine of CEO incomes will be much more realistic and not the huge amounts which has been revealed in the last decade.

Regards,
Bert Hoogendam,
Sarnia,Ontario C A N A D A .

I have no admiration for a CEO who demands a huge salary, especially while
his company founders, but I consider the demand to be, at worst, amoral.
If a company is doing poorly under someone's leadership, and that "leader"
says that he will leave without a pay increase, he is simply being a
schoolyard bully, saying he'll take his toys and go home. For the company
to pay more for being led into failure is not only immoral, it is outright
stupidity. If the company is holding its own or doing well, the decision
is whether the amount of money being requested would be more beneficial in
the CEO's pocket or invested (or donated) elsewhere. Even then, the
morality (or lack thereof) lies more in the response than in the request.

Patricia

I read your column in the Richmond (VA) Times Dispaatch.

Mr. Seglin:
Yes, there comes a point where it is just morally and ethically wrong for CEO's to make exorbitant sums of money. Just how much should one person make if the shareholders are held to a relatively small dividend (in comparison to the gross and obscene salaries being paid) and the employees are poorly compensated (which is almost always the case). I am saddened by the incredible greed of these CEO's. Think of how well their employees could live and the good things that could be done with the money if they took a reasonable salary and the rest of it could go to the shareholders and employees. It's not as if these are the most generous group of people in the world.....

Gayle Spinks
Costa Mesa, CA
Orange County Register.

DISCLAIMER: The opinions expressed in the e-mails to The Right Thing: Sound Off section of this Web site are solely the views of the those who sent them. They do not reflect the views of Jeff Seglin, The New York Times Syndicate or The New York Times Company.