Getting by on $100,000

Prepare yourselves. I’m about to propose something un-American, anti-free market, and anti-individualistic.

You have now been warned and, I hope, immunized. You will not react to the following by saying “Why that’s utterly un-American! etc.”

Ready? Here we go....

In America, starting now, no person will be compensated more than $100,000 a year.

That’s enough, already.

With that lid comes universal health care, no income taxes (with one exception—see below), an adequate pension, the best schools in the world and guaranteed food and decent housing for all. There will be so little crime, the nation will be down to two or three prisons.

We might even see such a shift in values that we will disband our military, saving trillions of dollars and thousands of lives.

Starting today, your financial compensation and your perceived or proclaimed “worth” are separate concepts. You aren’t paid what you have been told you were “worth.” Your worth yesterday was what some kept “compensation” firm or over-paid board of directors told you that you were “worth.”

Today, your pay can not exceed $100,000. If, like many well-to-do, you get your kicks by being told that you are “worth” millions more than the next executive or hedge fund manager, you can still be told that. You just won’t be paid it.

To assuage your ego, I suggest a badging system like medals pinned on generals’ uniforms.

“My company has put my ‘worth’ at $50 million,” you can brag, pointing to your $50 million badge. Of course, you’ll look like a fool, but that’s your choice.

But, just to be clear, that so-called displayed “worth” is $49,900,000 more than your are actually paid, and everyone knows it.

In fact you are paid exactly what someone who is really “worth” $100,000 is paid.

Isn’t that unfair?

Not really, because the current “compensation” game is rigged and the executive market is grossly and dangerously inflated.

I contend that if you feel it is really important that you be paid 300 times what a line worker in your company is paid, or 3000 times what some off-shore worker is being paid by your company, you aren’t even “worth” $100,000. In fact, you might be worthless. A liability. The door is over there.

Some might even suggest that you morally bankrupt. I’ve even hear it said that you are insane. Delusional. Sociopathic.

So what happens to the difference between your alleged “worth” and your real compensation? That $49,900,000.

See those benefits above? The excess pays for them — for you and literally thousands of others. That’s right, thousands. Do the math.

“But I can’t get by on $100,000 a year,” you complain.

“Try it. You’ll like it.”

Say what?

Yes, you’ll live simply (and discover how much you don’t need), stop destroying the environment through overconsumption, be contributing to a more prosperous, equitable society, be helping thousands less fortunate than you (most will be making considerably less than $100,000 annually) and you and your corporation will no longer have a reason to rig the political system and make a sham of democracy.

You will also recognize just how important public services, equality and fairness are to you, your fellow executives and everyone else.

You owe that $50 million “worth” of yours to the nation’s infrastructure (now crumbling), its schools (now in crisis) and thousands of public workers (now having their rights taken from them) who keep the nation humming along so your company can afford your bloated “worth.”

Well, won’t this all contribute to a massive brain drain to other countries? Not if you keep your American citizenship. You may be paid abroad, but a “foreign earnings”
 tax kicks in. It claims everything over $100,000. Sorry.

If you can’t live with that, leave.

Won’t there be unintended consequences? Like empty mansions, plummeting Mercedes sales, and uneaten caviar. Absolutely.

It’s all part of living simply and fairly. It will mean getting rid of status symbols and discovering that life’s real gifts are available to all, even you.

Trust me, with time, you’ll get your values straight. You will even come to appreciate your own true value — as a human being.

Are CEOs worth what they are paid?

In today’s Oregonian PolitiFact.com tells us that a commonly seen ratio between what CEOs make and what the average worker takes home is outdated. The old number bandied about on bumperstickers is 431 to one.

That’s so 2004, says the column. The most recent number, from 2009, is a mere 264 to one.

Here’s a fact from the column that makes things a bit more clear: a Financial Times story from August has the S&P 500 chief executives last year receiving an average pay of $7.5 million, while the average private sector non-supervisory employee is pulling down just over $40,000.

If that looks like a chasm of unfairness, consider that it's “only” a ratio of 187.5 to one.

So how do CEO’s themselves look at these numbers? With guilt? Shame? Disregard? Pride? Superiority? A clear conscience?

One critic and expert on executive compensation said, in the words of PolitiFact, “What matters most to executives and those who set their pay is how they compare to their peers.”

Compare? How? In greed? (Question: What does it mean to have greed-driven executives running our corporations? How might their motives influence their decisions? Will those decisions be all about their short-term, personal wealth rather than, say, the welfare of their workers or the quality of their products or the long-term health of the company?)

I suggest that CEOs and pay consultants (paid, by the way, with checks signed by CEOs) might look at outlandish executive compensation in a few other ways.

• What does the gross inequity do to the morale of workers. Do the CEOs care?
• What does it do the financial health of their companies? Do they care?
• Are such CEOs actually “worth” that much more than the average worker? Do they believe they are?
• Would the CEOs be worse off, really, if they were paid, oh say, 10 times the rate of the average worker, or $400,000? Could they get by on that? If not, what are they doing running major corporations?
• Who is the board of directors, often cocooned and self-inflated CEOs themselves, to decide what is fair? How about letting the stockholders and the workers, decide?
• What do CEOs, or anyone else for that matter, really need (as opposed to want) in terms of compensation in today’s world?

I want my retention bonus ... or else!

I’m trying to figure out this whole “retention bonus” thing that the corporate executives get in anticipation that they might leave for more money.

I’m thinking I might want to angle for my own retention bonus.

I begin teaching a 10-week course Tuesday. I’m thinking that about five weeks into the term, about the time I’ve made myself pretty much indispensable to the students' getting credit for the course, I’ll demand a “retention bonus.”

I’ll pass the hat around the classroom. "Your money or your class credit."

Why don't more folks demand retention bonuses? It seems like a no-brainer.

Why, for instance, don’t flight stewards come down the aisle collecting “retention bonuses” for pilots. The crew may have delivered you to 40,000 feet, but what if they decide they want a little extra to get you down — at least to where you want to go?

How about the plumber's demanding a retention bonus to finish the job? Without the bonus, the plumber could just walk away to another job that pays more.

Who's to say that those corporate executives are any more “indispensable” than the rest of us?

Think about brain surgeons in the middle of a job.

Or bridge builders.

Or soldiers.

Or bus drivers.

Hey, wait a minute, you say.

What about pride in one’s work? The satisfaction from a job well done?

Customer or company loyalty? Commitment to one's students, patients, passengers, nation?

Those are all so NOT what's happening. I mean, aren’t we really all in it for the money?

Today, commitment, loyalty, perseverance now come with a price — the retention bonus.

In the case of the executives, the bonuses are hundreds of thousands, even millions of dollars — and they apparently don't even have to ask for the extra money. It's just assumed to be part of the deal. Give 'em the bonuses — or expect to pay the consequences.

Then there's the curious metaphor "golden handcuff," which is what "compensation consultants" (another timely topic) call really big retention bonuses. The handcuff image begs deconstruction—starting with the question: Is a handcuff, even a "golden" one, ever anything more than a handcuff?

Stop!

In the spirit of the subject, I refuse to share any more thoughts about retention bonuses ... until I get one myself.

Sorry, but that’s the way things are.