CEOs are paid well. Their pay represents their responsibilities. Most employees are paid for their work. Corporate executives are paid to make the right decisions. The buck stops there. Many bucks do. I wonder if the money flows up out of habit. Lots of work is getting done, but without a similar raise in workers’ salaries. Meanwhile, executive compensation has risen enormously, especially in the top 1%, but I think there have been fewer rather than more right decisions being made.
A friend took me out to lunch today. It was a rare treat. We’re both entrepreneurs, also known as small business owners. Recently his business has been doing better than mine so lunch was his treat. We also both worked in the corporate world decades ago. Many of our friends are still there. We also are invested in some of the same companies. We’ve witnessed a lot of administrative maneuvering that had little to do with managing the company.
Our businesses keep us busy. The work is emotionally gratifying, but the financial side of the compensation is not enough to keep our cars maintained. Our corporate paychecks were massive in comparison, but both of us burned out from an environment that drained us. I don’t know how busy a CEO’s job is, but CEOs and each of us only have 24 hours in a day. We doubt that they are working that much harder. The poorly managed nature of some of the businesses suggest that many aren’t even making the right decisions.
Responsibility is a frequently used term, but I think we’ve lost sight of its base meaning. Responsibility is the ability to respond. Many jobs are equipped with responsibilities. CEOs aren’t the only ones that must be able to respond. And being able to respond is merely the lowest requirement. Except in extremely locked down procedural bureaucracies, even workers are required to respond appropriately. It is one of the characteristics of emergency workers. Firefighters are very responsible people. If the ability to respond appropriately was compensated similarly, firefighters would have much bigger houses.
Responsibility is used to describe the person who takes the blame. If something fails, the responsible person takes the blame. But I think a truly responsible person is not simply a public scapegoat. And, even if that was the case, a public scapegoat probably shouldn’t be paid more than someone who is actually doing work.
I am most impressed with people who treat responsibility with integrity. They sincerely try to make the best decision, and they also step aside if it looks like someone else could make better decisions. A CEO is responsible for maintaining or improving shareholder value. Maintaining and improving shareholder value does not imply massively compensating a CEO and entrenching them in their job, especially if the company is not doing well. It may sound like a fantasy that someone would step aside because they saw that others might do a better job (it happens in Japan, but please skip taking it to the extreme of ritual suicide). We’ve even had a president that knew that getting the right things done was more important than his political career. President Polk‘s example is so uncommon that we ignore him and his ethics.
Many small business owners, artists, and advocates are aware that they be active, engaged, and emotionally rewarded for their hard work; while not making enough to live. The same is true for responsible people like police, firefighters, teachers, nurses, and alternate health care providers. Oddly enough, the majority of people work for companies that have more than 500 employees, large enough to encourage bureaucracy and to distance employees from the customers they are responsible for. But at least they are more likely to be paid well and receive benefits. Another self-employed friend pointed out that after 17 days of having to work while sick, because if he stops the business and the money stops, ” . . . how horrible it is to not be working for a company with benefits…like sick days and regular pay. ” Take that step further up the corporate, or even the political, ladder, and arrive at jobs that seem to compensate good and bad decisions, with rare consequences. Such an inverse relationship is not healthy or sustainable. In some ways it is very feudal.
Feudalism wasn’t sustainable. Responsibility and hard work are eternal and essential. I’d like to write about significant trend that suggests our major institutions are heading towards paying for true responsibility, and that integrity is practiced. I can’t. CEOs leave, but only after massive losses that affect the majority of their employees and shareholders. Politicians can be voted out, but the duopoly perpetuates incumbencies. I do however, see a small trend amongst individuals. The 99% are asking for responsibility and integrity, and are willing to work. I am most impressed though with those that are taking responsibility for their own lives. Whether that is moving off the grid, growing their own, or actively living a more frugal life there are people who are responding to their personal values with integrity. They may not change everything immediately, but they may be our role models for demonstrating personal responsibility.