CEO Compensation

Well, I voted no on this question because I think that large salaries really mean over-compensation. I am not against executives who risk greatly to be rewarded greatly but with all the scandalous news of Golden Parachutes for executives I favor some sort of oversight and accountability for these folks.

Interestingly Christianity Today recently published an article called:

Where Do Evangelicals Stand on CEO Compensation?

Here are a few excerpts from it:

I do take these evangelical CEOs to task [over executive compensation.] If they are really interested in working for the common good, they ought to figure out ways where they can be a little less self serving. That's really strong language, I realize, but it seems to me this is one area where they can really stand apart from their secular peers and, on the whole, they don't. I did come across evangelicals who presented attractive examples of trying to live out their faith [amidst great wealth,] but these were notable for being rare.
In their 2008 book, Good Intentions, journalist Bob Smietana and Baylor University economics professor Charles North argue that Christians can influence the issue of CEO pay through the clout of faith-oriented institutional investors. Smietana and North write that "the gap between rich and poor should trouble" Christians, and that Christians should "live out biblical concerns" over economic exploitation in general and the executive pay issue in particular "by keeping a watchful eye over companies where their churches have some clout."
Corporate greed is something that has disheartened Amercian workers. Folks have watched their jobs exported and outsourced overseas while fat-cat executives have rolled in millions upon millions of dollars. I do think that Christian executives like Ken Lay of Enron and Bernie Ebbers of Worldcom have been poster children for corporate greed and executive excess.

I think that corporate executives who name the name of Christ should be different.

What do you think?


  1. Bob I agree with you on this and it brings up another form of compensation that is very common in some ministries. I would love it if you shared your thoughts and asked your readers, what they think of "self supporting" staff members of large ministries.

    For example. The ministry I am with has several thousand staff members. There are two types of people who work here (which is a very different and much debated topic of its own). One type of worker is considered an "hourly" meaning they get paid by the hour to do jobs that the others type of staff "missionairies" won't or can't do (for example, most of our computer people are hourly, our administrative staff, the accountants, etc. I am an hourly).

    The "supported staff" (aka missionaries) may work in the office (all the management positions) or may work out in the field or a combo of both.

    They receive compensation by getting donations from people they know that support them on a month to month basis. I've seen some supported staff families struggling to pay the bills and others living in upper class style. It all depends on how good they are at raising support and who they know, etc.

    The idea is that they are trusting God for their finances (a portion goes to the ministry as a whole to run overhead costs, etc.)

  2. Pay should be up to the company, but if the company folds, the CEO should be affected the same way. The only time government should have any say on pay is if you work for the government, otherwise it is all about what is fair and what isn't, and when it comes down to that, it is up to far too much interprutation

  3. I am not sure what "Pay should be up to the company" means Scott. Many executives are highly overpaid because the board of directors of their companies are buddies of the executives.. and these board members are almost impossible to get rid of if the executives support their bord membership.

    The executive compensation system in place in Corporate America is a corrupt one.. I believe that stockholders and employees are being swindled and don't have much recourse.. just look at Enron and Worldcom.

    Here endeth the rant :)

  4. The gap between the management and the workers does more to contribute to class warfare in my opinion than just about anything else. Conservatives like to assert that Liberal's promote class warfare but the actions of those in power in the last decade and those who rationalize such behavior has created such resentment that the general public now seems to be turning against such gross inequality.

  5. The natural consequence of overpaid CEOS is a poor performing company that could go under. Pay is just one of the thousands of such decisions that affect a company. If we go down the road and micro managage executive pay for the alleged betterment of the regular worker, where does it stop. Should the government approve plant expansions, new lines, or marketing. I don't want Government managing pay. I don't even agree with a minimum wage.

  6. "The natural consequence of overpaid CEOS is a poor performing company that could go under."

    Any examples of this Scott?

    How about Carly Fiorina and HP? She walked away with 21 million dollars when she was fired for poor performance. All that proved was that her lawyers negotiated a truly golden parachute and the board members that let it happen were simply stupid.

    Or how about John Walters of AT&T who walked away with 31 million dollars after only 9 months on the job.

    These executives take no risks yet are rewarded like they did.. I just don't think that is real capitalism.

  7. Just came across this story at Christianity Today:
    In 2004, John Tyson was serving as CEO of Tyson Foods, one of the 100 largest companies in the United States. The company experienced a financial downturn and decided to shore up money by demanding wage cuts from line workers. At that same time, Tyson's annual compensation grew by leaps and bounds—upwards of $20 million. Eric Schlosser, writing for the Nation, summarized the feeling of many critics: "During an interview … Tyson outlined his personal theory of labor management, … [citing the importance of] a moral anchor. Tyson said, 'You have to serve the people that work for you … and in effect become a servant to the people that work for you.' He said it with a straight face."

  8. My thinking on this is straight forward. No compensation is due a fired CEO who has driven a company straight into the ground. None, nada, not a penny. CEO's fired, he/she packs up their personal belongings, is relieved of their company ID and building passes and is escorted out by company security just like the working stiff who was downsized out of a job yesterday. As far as I'm concerned, paying someone tens of millions of dollars to "go away" is tantamount to paying blackmail.

  9. As your post implies, I have noticed that much of the conservative rhetoric doesn't match what's actually happening in the real world. Tyson's statements compared to his actions are a good example of that too. Talk is cheap - servanthood is expensive. :)

  10. Personally, I don't think it is wrong for a Christian to accept CEO pay for CEO work. They wouldn't be breaking any laws of society and I don't believe the Bible says we can't accept the money, even if it is an obscenely high figure.

    We need Christians (and I mean Christians that are truly seeking God and therefore doing what is right) in positions at the top of our companies. The bible does say not to "muzzle the ox that treads the corn".

    I suppose the bottom line for me is that Christians in high positions in the marketplace can have an incredible influence. Plus if they are tithing, they can greatly impact God's kingdom through their giving as well.

    Just my perspective, although I do see where you are coming from with all of the corruption out there.

  11. But Janna, what of the CEO, like John Tyson of Tyson Foods, who seem to be (to use your quoted phrase) muzzling the oxen on the assemmbly line while lavishing himself with millions of dollars.

    That seems to miss the point of scripture in a huge way becuase the (comparatively) poor are being mistreated while the rich just get richer.. where is the integrity in that?

  12. Good point, Bob, and I would hope that you know that I am not in favor of unfair treatment of people or unethical behavior in any way. However, my point is that we have to work within the current system, flawed as it may be and make little changes as we can.

    I suppose the real question is, what should a CEO get paid? After all, they do bear a lot of responsibilities and pressure. They should get paid the "big bucks". How much? I don't know. If we knew that question, maybe we could get to the bottom of the issue.

  13. Hmmm.. Janna poses this question

    "I suppose the real question is, what should a CEO get paid?"

    How about if the company is profitable his annual compensation cannot exceed 100 times that of the median compensation of non-management employees? And absolutely no stock options!

    If the company is not profitable then the max is reduced to 25 times the median.

    That formula seems fair to me.

    Anyone else have a better one?


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