Letters to the Editor
Justifying Executive Pay
In response to “Over the Top” in the September issue, it’s not a question of whether executive pay can be justified on legal or economic grounds (I believe it can). It’s a question of what is right and what is wrong. CEO pay has gone from about 40 times the average worker’s salary to roughly 350 times during the last 20 or 25 years, with the obvious result of increasing the difference in the haves and the have-nots. This is, I believe, both unseemly and offensive to the vast majority of the American public. What can be done about this is a good question.
One suggestion I have is to increase transparency by requiring all companies that file a proxy statement to include a graph showing executive compensation for the top three or four officers and compensation for the average worker over a period of time, perhaps ten years or longer, or as long as the company has been reporting.
Arthur Rock (MBA ’51)
San Francisco, CA
Lodge Foresaw Big Issues
Thirty years ago my OPM 3 classmates asked Professor Marty Marshall about the ethical values in a case. Marty regretted that he had no cases on ethics but he suggested a visit to Professor George Lodge.
Professor Lodge had recently authored The New American Ideology, in which he argued that old ideas about individualism, property rights, and competition were increasingly irrelevant in a world of necessarily huge organizations and limited resources. The United States, he said, was lacking a sense of direction and control.
In your September issue, I noted that Professor Lynn Paine and several others are finally grappling with these issues, anticipated by Professor Lodge, in cases, meetings, and books.
Hampton Terry (OPM 3, 1979)
Valencia, Spain
