CEO pay: Would they do it for less?

A May 25 report from the Associated Press says that typical pay for the CEO of a large public U.S. corporation was $9.6 million last year, up 6% from 2010. That's a median figure, so half of CEOs got more, half got less.

I think that's way too much. In fact, the typical American worker earning median pay of $39,300 would have to work about 244 years to match the typical CEO's pay.

I realize that the "right-ness" of CEO pay scales is a hot-button issue with no clear-cut resolution. And I sure do agree with the notion that in America, you and everyone else have a chance to make it big. But throwing money at people isn't what I call American pie.

We need to keep asking the boards of directors of the big companies what the heck they're thinking when they hand out multiple millions of dollars to their CEOs. Too many CEOs have raked in millions while the prosperity and stock price of their companies deteriorated.

Here's my basic question: what would happen if all the CEOs were paid less? I'm not talking about cutting them back to $39,300 a year or anything….I'm talking about cutting the $9.6 million guy back to $9 million or a mere $8 million or a lousy $7 million…..

If Mr. CEO of Big Company, Inc., was paid $9.6 million last year, what would he do differently this year if his board cut him back to $9 million? Or $8.6 million? Or $8.1 million? Would he suddenly be less creative, less bold, less dynamic, less competitive, less aggressive, less dedicated to his company? Would he start doing a crappy job if his pay was cut a bit? Would he have fewer good ideas? Would he be less of a leader? Would he leave the company? Could the board hire some guy or some lady who was equally good for less than $9.6 million?



I realize there are lots and lots of variables and market conditions and competitive concerns to think about in considering those questions.

I think the answer to almost all of those questions is most likely "No", and I think the answer to one of those questions is most certainly "Yes." And you already know which one I'm thinking of…..

More on CEO pay.....