I recently read a blog post written by Chris MacDonald at The Business Ethics Blog. I don’t always agree with everything Mr. MacDonald says, and this is no exception, but I feel that his arguments are based on a primarily false assumption in his post Exploitation at the Top that the executives that are being socially pressured to accept less compensation are somehow “owed” what they are getting in the first place.
Let’s examine for a second in what way these people are “owed” anything. Not all executives were directly responsible for the actions that lead to the financial crash we’ve experienced, but still, we’re talking about “bonuses,” which are a reward for good work. Contractually obligated bonuses are no more than salary, so I don’t see why people should either receive extra money or have their salary raised for failing to succeed in their jobs. As a side note, I find it ironic and amusing that the same people who argued for the sanctity of contracts when it comes to executive bonuses also argued that union auto workers should have their salaries and benefits cut despite their contracts, but I digress.
Compensation divorced from achievement is pure insanity, and I fail to see how the legitimate anger of people who have been dealing with rising prices and falling service for years now qualifies as “exploiting the weakened position of executives.”
Honestly, it is not exploitation to demand that CEOs and upper level executives take less money for themselves that could be used by the company to lower prices, increase quality, or hire more people when the unemployment rate is so high. How many people’s yearly salaries can be paid if a CEO takes a $4 million bonus instead of $12 million? How many more people could be employed if John Thain didn’t spend $1.22 million redecorating his office while reducing his workforce.
The very idea of attributing any sort of social pressure to exploitation of upper level CEOs and execs is almost comical. I appreciate Mr. MacDonald’s originality and the implied idea that exploiting people who have made their substantial livings on exploiting others is still wrong, but the consumer wields precious little power over companies of a certain size, especially when there is no competition due to the tacit agreements of corporations to not lower prices, and expressing their anger publically is some of it. While I don’t condone more extreme actions like the death threats some corporate CEOs have received, I see no problem with public threats of boycotts or demonstrations.
The executives of corporations have been exploiting consumers for years now in a carnival-like atmosphere, consequence and regulation free, and it sank our country into economic disaster. Now that people are demanding that they do their job before getting paid for it, they feel that are being treated unfairly. Unfortunately, you can’t go on preying on those with less power than you forever. I suggest taking bonuses only when you actually achieve something, so you don’t have only downsizing and higher prices to point to when people want to know what you did to earn those multi-million dollar checks.
