- Published on Thursday, 05 November 2009 00:43
- Written by John Draper
- Hits: 2205
It seems that the thought that CEOs are getting obscene wages has reached the realm of religion. Brian Griffiths of Goldman Sachs defended Goldman's plan to pay on average each of their workers over $500,000 this year. He was speaking at a panel discussion at St. Paul's Cathedral in London. The panel's discussion topic was, "What is the place of morality in the marketplace?"
And now Barclay's CEO John Varley told a crowd at St Martins in the Field in London that rewarding high-performing bankers with more pay doesn't conflict with Christian values. Varley was paid 1.08 million pounds ($1.77 million) and no bonus in 2008 but expects much more than that this year as the economy recovers.
The good news is that CEOs agree that the whole financial crisis is a moral issue and that CEO pay is a moral issue. The bad news is that they still don't understand that these pay levels are simply excessive by any standards. They claim they are needed to be competitive and keep talent but there is something wrong with the market place when these salary levels are required. Using Wall street numbers, if the highest paid gets around $10M and the average in Canada/US is around $50K, then the top dog should be 200 times more valuable. And the whiz kids doing analysis etc who get around $1M should be 20 times more valuable. Although this is impossible to truly quantify, it's hard (and for me impossible) to see how they could have that much higher capability: e.g. more intelligence, charisma, people skills, street smarts or any human characteristic. Shouldn't that be what they are paid for?
Another way of judging might be that each level up the ladder should get maybe 30% more than the one below. That's enough to motivate for a promotion. Let's count the levels (worker, foreman, team leader, manager, director, VP, Exec VP, Division VP, CEO.) In this case there are 9 levels and if the worker gets a generous $50k, the top dog should get around $700K. There are some companies in Canada where these are approx the salaries although bonuses add another 50% to the top 2 levels. And these are successful companies although not in the Fortune 500.
So the million dollar plus salary levels are unnecessary and given that they ultimately come out of the pockets of consumers and taxpayers, it does not pass my ethical test. And in case you haven't figured that out yet - atheists generally apply the golden rule. Do to others only what you'd be happy for them to do to you. And I'm not happy for them (high paid CEOs) to do this to me!
Christians and for that matter most religious people, also say that they have the same rule. So these wages are unethical by anyone's standards. And now at least a few CEOs are defending themselves - the implication is that they know what everyone is thinking.
It will be interesting to see if any religious leaders come out and say that such wages are immoral (I'm not talking profits here). Here is at least one atheist (me) who says they are.