I am no fan of overinflated CEO pay packages. For example, I have written previously about the pigs in Yahoo’s executive management and their obscene use of stock options.
What bothers me even more is lazy, inept reporting by the MSM, who so obviously don’t understand free markets or basic economics. Case in point, this headline from ABC News,
Exxon Chairman Gets $400 Million Retirement Package Amid Soaring Gas Prices
April 14, 2006â?? Soaring gas prices are squeezing most Americans at the pump, but at least one man isn’t complaining. Last year, Exxon made the biggest profit of any company ever, $36 billion, and its retiring chairman appears to be reaping the benefits.
Tom Blumer at BizzyBlog says,
yes, I think itâ??s excessive, regardless of how great a CEO he was â?? BUT itâ??s the shareholdersâ?? problem to fix, not the governmentâ??s.
That is certainly true. Executive compensation is the job of the board of directors and the shareholders they work for. When the pork loving patriots on Capitol Hill, from both sides of the aisle, were talking about a windfall profit tax on oil companies, I said NO for the same reason. Since when does the government get to decide what is excessive profit?
What gets me is the way this is being reported by the MSM. According to ABC News, it is as if Lee Raymond’s retirement package and total compensation is a result of one year’s operating results. This is so simplistic, so transparent, that it is just sad. They make it seem like we pay $3 a gallon at the pump to pay for Lee raymonds country club membership. There is much to criticize about executive compensation, but what the media is doing in the case of Lee Raymond is pure politics.
When Lee Raymond joined Exxon, John F. Kennedy was President. He started as a a production research engineer and rose steadily through the ranks. We are talking about a 43 year career. By the time Raymond took over as CEO in 1993, Exxon’s was already the largest market cap company in the world, at $89 billion. With Raymond retiring in 2006, Exxon’s market cap is $375 billion. Not a bad run, for Raymond, or those he works for, the employees and shareholders of Exxon.
Criticize executive compensation all day long and you’ll get no objections from me. What I object to is the politically motivated and uninformed reporting. To do so properly would require actual work, research and analysis. You won’t see that coming in the MSM when they can just run with stories like Exxon CEO is rich because he gauged you at the pump.