"Very few of these execs really deserve the pay they get."
Who's to say? I can't fathom paying anybody a nickel to shoot hoops but those guys a re rich, too.
To me, it should be based on how much MORE money they make for the company than what it would otherwise make (which by the way is what the classical capitalist economists would say it should be in a free market. They call it the "marginal product.").
I'll grant you that it's really difficult to determine that, but the point I'm making is that the numbers these guys get really have nothing to do with that no matter how you look at them. A company can lose a ton of money while the CEO makes off like a bandit. The Exxon CEO bases his shocking compensation package on what the company earned, as though it was totally his doing... No recognition for the fact that the market was just up. That's a profit that should go into the stockholder's pockets, for their foresight to invest in a market that is about to explode.
Like I said, the only possible explanation I can give for this is that the corporate laws are written to put control of the company in management rather than in the stockholders. Some states, especially Delaware, have made a fortune off of writing laws that are designed to give management more control vis a vis the shareholders. The end result is that management incorporates in DE, and gets to pay itself whatever it wants.
Same goes for Hollywood actors. I think there should be a cap on how much an actor makes per picture.
Proof reading might help. But if I get your drift you are comparing apples to oranges and getting a pear.
Totally different situation. IN the case of actors/entertainers/writers they ARE the product that rakes in billions. And if you want the best you're going to have to pay good rates.
Now, mistakes are made, bad contracts are signed and sometimes you DO have to pay a guy to leave but generally it's not a corporation that has stockholders and in those fields, people are paid MORE when something does WELL or when they do well individually.
They are not paid the bulk of any money they've ever earned after being FIRED due to lack of performance.
Shaquille O'Neal made the Lakers money and deserved a piece of it with his huge contracts. What the hell did this dude (and others) make? They're being FIRED for poorly performing stocks or profit.
The situation is more analogous to government bureaucrats deciding on salaries and then making sure if any of them is fired, that a huge severance package is in the works so that they get paid when their time comes due. All without input or authority from the voters who actually pay their salaries.
Or how about consistent pay increases for Senators and other perks?
Those are totally different situations than CEO severance deals.
It takes talent to shoot hoops or hit fastballs. Only a few people in the world have that kind of talent. On the other hand, you could replace any given big-corporate CEO with a jar of mayonnaise for a month and no one would notice.
Guys like Mr. Home Despot have but one talent: convincing people to give them large sums of money for nothing. In other words, they're con artists. And since the rules of the economic game are set up by con artists to reward con artists, it appears to the rest of us that they deserve every dime they swindle. They make for us a kleptocracy and call it free enterprise.
The only solution is to rewrite the game rules to benefit small family businesses instead of gigantic joint-stock corporations. But of course we won't do that -- until we have no other choice.