I agree there is a lot of cronyism taking place in some of these institutions and I don't agree with some of what goes on. But I wont say that they shouldn't make the money they are making. I'm not in a position to know the details of their day to day business operations to decide for myself if they deserve it.
I work for a fairly large company and I don't know how much my CEO makes, but I bet they deserve it. But even here I don't know the details of how they work and what they do, so I definitely can't expect to for other companies.

As far as one person running the company I agree with you. Read the book Good to Great by Jim Collins. He will discuss how the great leaders of companies don't take all the credit and surround themselves with the people who will enable the company to succeed.

Are you aware The Woz wanted to give away the plans for the Apple I? Brilliant engineer but not biz savvy. Both together was what made it work.

http://youtu.be/gtuz5OmOh_M

Steve Jobs saw the value at Xerox Parc and hired away half its staff. Xerox was not going to capitalize on the research so Jobs did. Did you start and grow a company?

I agree about Jobs stealing ideas. However, he used good patent law to escalate the value of his company only to lobby to have patent laws weakened for this competitors. He was visionary and he should have stayed disruptive with his ideas. He chose to head into me-too tech.
What's with the benevolent picture of Mandela on the Apple website? what does that have to do with Apple branding?!

A salary is a cost of labor.As any cost it defined by supply and demand on the market. The CEO's salary is not an exclusion. Any company which pays his CEO more than he worth will work at loss and will go out of business.

Ahh. The myth that they are accountable to shareholders. Nonsense. If you, Nickursis, and I own a company and we hire a CEO. We can pay her what the market says she is worth based on the value she brings us as owners. If a million people each own a share of a company, or if ownership is spread amongst institutional investors, then they have very little say. Jack Bogle, the founder and retired CEO of Vanguard, has talked about these problems quite a bit. He argues that large companies are being run by managers for the benefit of the managers - not the benefit of the owners.

Here is one of his interesting speeches. I would propose that AR's heroes would cheer this speech. They were not really just about earning money. Money for them was a way of keeping score on their achievements. Hank Rearden was not about "getting more money by any means possible", he was about using his mind and abilities to produce what he was capable of producing. Getting paid for it was the legitimate reward and a way to measure the value of his production.

http://johncbogle.com/speeches/JCB_Imm_1...

Why? Why should they get more for their work? Their time there is "worth" what the job is worth. I don't care if they're a friggin' brain surgeon, if they're pushing buttons on an elevator all day, they're going to get jack squat for pay.

And no, boycotting any business because you personally don't like their practices isn't right or wrong, it is what it is. It may be stupid, or it may be good. If you wanted to boycott South Africa, so be it, if you want to boycott McDonald's, so be it, it's your money.

And yes, it is as simple as I say. It is not wrong for them to get paid 1 million or 100 million a year, because it is a private company. Nobody is forced to invest in it, nobody is forced to go there. If Government was involved and forcing people to be involved, that would be another story.

I am not sure that we totally agree but I could be wrong. I guess the focus of my criticism is not how much the CEOs receive in compensation or that, clearly, in many cases it does not reflect any real value that they created for shareholders. Instead, my problem is that most of these companies have their noses in the government trough. They are either being paid for wasteful services to the government regardless of value provided and in a manner that makes their programs nothing more than big welfare programs like most of the military-industrial complex (with its revolving door of retired military officers and politicians) or they spend inordinate amounts of money buying off politicians for special favors in the form of laws customized to help them or their industry, designer tax breaks (granted I think there should not be a corporate income tax at all), loans or special grants or contracts, and bailouts.

You are absolutely spot on. Steve Jobs took $1.00/yr for Apple, and his replacement:
"The tech world was abuzz Monday when the compensation package for Apple's new CEO Tim Cook was released.

The total for 2011?

$378 million.

This was comprised of $900,000 of cash salary and a $377 million stock grant.

That total compensation, observers were quick to point out, was 378 million times as much as Apple's last CEO made. Steve Jobs, famously,
Steve Jobs was paid $1, in part, because he already held a big position in Apple's stock, thanks to an option grant when he returned to the company at the end of the 1990s. Steve's original option grant had exploded in value thanks to Apple's amazing renaissance, so by last year it was worth several billion dollars." took home $1 a year.

Thats "only" 86787.035 per hour!! Assuming 12 hours a day, 7 days a week, 52 weeks a year (someone that almighty and powerful, should be able to multitask windsurfing and running his empire). Maybe next year they will crack 90k/hr.

Makes Micky D look absolutely CHEAP! How dare they slight the genius of American Industry and Power (not to mention they do have good fires)?

Granted, he only gets shy of a million, but it is all the "stock" that costs the company.

Has anyone checked out the prices of a MacBook Air, or Ipad? There's a reason they costs so much, and it isn't about quality. Remember, those things are built in the same Asian sweatshops as Lenovo, HP and all the rest.

The end of the article:
"My colleague, Yahoo! Finance economics editor Dan Gross, however, disagrees. He thinks Tim Cook is now just another CEO-pig-at-the-trough. No matter what Cook does over the next decade, Dan points out, he'll still walk away with hundreds of millions of dollars."

And if "shareholder value" is the result of spending a huge amount on these dudes, look at Apples stock over the last 2 years, and if you cannot see how it has been manipulated by the traders (irregardless of CEO, who could have been the Micky D's head French Fry cook), then you probably also cannot figure out that everyone PAYS for these clowns, it isn't about the "it's their business" thing, the money blown on these guys is all part and parcel of everything you buy, guarranteed. You are paying their bloated salaries at some point, or paying for their 300+ million shares.

"Theres no such thing as a free lunch" "Tannstaffel" Robert Heinlein

http://finance.yahoo.com/blogs/daily-tic...

Yet I see defenses of big business all the time from AR fans and libertarians. As though the Fortune 500 CEOs are Dagnys and Hanks. When in fact some of the biggest looters in our country are Fortune 500 companies. The closest I can come up with to "our heroes" in the real world are people like Richard Branson. Maybe Steve Jobs. Possibly Bill Gates. And maybe Elon Musk but he relied on a huge government loan for Tesla motors and his Space One thing would not be going anywhere without NASA funding.

Great point!

Your flaw in the argument is I don't buy houses for 3 million. However, I do know people who work at McD's and I do know they should get more for their work. If i had the input on the CEO's pay I wouldn't give it to him. I agree I do not have control over the company or it's policy. But by your logic, then all the people who boycotted South African business in the 90s to end apartheid were morally wrong, because they do not live there, nor did they have any direct business dealings with them. It is the moral question of value for value, if a person pays 1500.00 for a card, I think they are stupid, but not immoral for that act. But if they are paid 1 million a year just because they know someone on the board, or are in the right clique, then yes, it would be immoral. There is no black and white solution, but it definitely is not a simple as you say.

Excellent point! And very true. I think that was specifically what she was trying to illustrate in AS. You can easily regulate a business by just imposing penalties for bad behavior (like steep fines for pollution) and NOT have to have the whole machine to require specific equipment or tools like they do. But then, the reality is all that is bought and paid for by the lobbyists for that company or group. Business should only need to have the requirements laid on them, not how to meet them. As for those who think business should have totally free reign to do whatever they want, that is just as impractical, just look at Love Canal for what happens when you don't control those same "genius" CEOs that get paid so much. When you offer someone incentives for cost cutting and stock pricing, all the "moral" rules go out the window. No accountabilty or liability. Enron is a good example of that adventure.

That is true, if people were concerned enough about the morality of the system, they COULD take action by not buying a particular product or service. It goes back to the whole "control" thing, some are overt like Obamacare, some are covert (like the use by politicians of the "hot button). It is incredibly hard to ever get a group of Americans together to do anything anymore, because they are so easily fractured. If you want to derail a Republican candidate, just start the rumor they are pro-choice, if it is a democrat they are anti-abortion. None of it needs to be true,but you can break up any group. It is the same right here in this discussion, a large group seem ok with people who take the system for all they can get, but will scream if a politician rides the system and uses their money for whatever they want. Yet both are the same thing, you will pay for both of them in the end, through higher taxes and fees, or higher prices. It goes back to value for value, and I do not believe these CEOs give us value, nor do the politicians.

Your argument is only partial, what about the companies that DON'T improve/do better. I have never seen one yet that did anything but dump a bad CEO (with the appropriate compensation of course). Maybe you folks are missing the flick here: They are not just hired, and paid a salary, there is a whole subculture to this, with agents, representatives, a huge number of parasites, contacts, partial payments, etc. It is a friggin cottage industry? All to decide how a company is to run? Also, if you think compnies run on the willpower of 1 person, I believe you are incorrect. The best companies have many good people in many levels, that make that company successful. It is the CEO's then who take the credit (and the money). It's a bag of goods they system has sold to the masses.

As far as the comments about Dagny, the reasons you give are precisely the reasons she isn't invited to the Gulch. She isn't ready to stop trying to turn things around and she hasn't grasped the greater threat her brother and the related activities represent.

I agree with Rocky. It's value for value. If the CEO feels they are paid what they deserve and whoever decides the salary of the CEO feels they are getting a value from the CEO then we shouldn't worry.

Your next post talks about how the market doesn't dictate salary, the board / shareholders do, and the shareholders aren't regular majority shareholders anymore I also disagree. If a business is making money as a result of the overall direction a CEO takes the company then they deserve to be rewarded for their effort. If they are not making money or their profits are decreasing then they wont keep their position for long.

Hello nickursis,
It is true that the costs are passed on to you and I. If we were *all* doing better would that matter? I think one thing to consider is the possibility that the increasing disparity is not because some CEOs are earning so much more unjustly, but that in this economy the poor and the middle class are not keeping up. Why is that? I believe it is largely because of government interference in the market that has driven opportunity and higher wage jobs out. The rich, are, by virtue of their wealth, better insulated from the economic downturns.

I have been involved in the metal working business for 4 decades and it has been my observation that the increased taxation, regulation, and trade policies have greatly diminished these opportunities. When our government decides that power production and heavy industry is dirty and we should re-direct our energies towards green technology and subsidize things not yet ready for prime time, while making it hard for existing industry, people will suffer. I have seen the costs soar for companies that have been able to remove 97% of their "pollutants" with expensive but affordable processes, but the last 3% is either impossible with existing tech. or it is prohibitively expensive. Yet the government is not satisfied, despite the apparent improvement of local water and air quality. The jobs then go to China or some other nation without the EPA or OSHA breathing down their necks. In the end we have fewer jobs and the environment is not protected. The pollution is greater than it would be if the industry was kept here; it is just shifted to somewhere else on the globe, along with the jobs and wealth of this nation.

How do we fix this? Protectionism does not work, but an even playing field helps. Proper monetary policy and exchange rates... practical, reasonable regulation and trade policies...
It is sad really. I am one of the survivors in a largely devastated tool & die business. Today we are often making repairs/corrections to tools that were built in China that we should have built here. I have had to reduce my work force due to reduced demand and we have to repair inferior foreign built tools to keep the doors open...
Respectfully,
O.A.