IS MONETARY REWARD NECESSARY?
It offends me when I see that the top brass in most public companies receive compensation fifty or a hundred times that of their average worker. Not that I'm offended because they deprive me of increased dividends, although they are indeed doing that, I'm offended because their compensation bears no relation to their performance as indicated by their company's profits and growth. Furthermore, many highly paid CEOs of these corporations are simply caretakers, rarely doing creative things to enhance their company's earnings. When I employed a few former corporate executives in my business, in time I had to fire them because they simply couldn't get things done.
Most of the outrageously paid executives of these companies are employed by American corporations. By contrast, executives in Japanese corporations, many of whom are creative and successful, are paid only a fraction of what ours receive. Why do we compensate so egregiously? It derives from the materialism of our culture in which we believe that material success founded on money is the nexus of life. It's the prime motivator. This idea, this pursuit, so typically American, has gotten us and the rest of the world into the current economic mess we're in. Directors on corporate boards, corporate stockholders, young graduates of business schools, lawyers just out of law school, investment managers, and bankers, all subscribe to the idea that making money is the supreme goal in life.
But this is not true for all people either young or old. Take the artist for example: his or her reward is in the act of creating a painting or a sculpture or, in the case of a writer, a novel or a short story, or for a composer, a song or a symphony. Or take the scientist seeking to design a cure for a particular cancer. Watch them in action: that artist, that writer, that composer, that scientist is intensely absorbed in the creative process unaware of anything but the work itself. Where's the compensation or even the recognition? They have no idea whether it will come once their creations are exposed to the public, nor does it matter, because the very act of creation is an end in itself. That is all that really matters. Once compensation becomes the goal the work is diminished and often fails. Its falseness ultimately shines through.
Contrast with these people the corporate executive who demands being paid exorbitant amounts whether he or she fails or not. That executive's goal is in the compensation and only secondarily in the creative challenge of succeeding, otherwise if offered less no deal is possible. And who establishes such compensation? Why the board of directors, of course, who by rewarding so exorbitantly expects miraculous results because money is all that really matters. The boards therefore also subscribe as a matter of course to our materialism as the essential motivator. But not so much today's stockholder who is finally waking up to the fact that these days compensation is unrelated to performance. Unfortunately the stockholder has little clout against the inherent conspiracy of the hired executive and the board who wash each other's hands.
Regardless of our cultural imperative, I submit there are plenty of capable executives in our society who would be willing to run companies for just reasonable compensation in relation to the rest of the employees. They would do so simply for the joy and the challenge of not only improving a company's performance, but in so doing making a contribution to the nation, the world, and the community. They would become the artist, the writer, the composer, or the scientist whose creative achievement is what really matters, and is the best compensation of all. They could take pride and say of their lives that what they have done will endure far beyond them. What could be more valuable than that? Try hiring such people you boards of directors and be surprised.
Most of the outrageously paid executives of these companies are employed by American corporations. By contrast, executives in Japanese corporations, many of whom are creative and successful, are paid only a fraction of what ours receive. Why do we compensate so egregiously? It derives from the materialism of our culture in which we believe that material success founded on money is the nexus of life. It's the prime motivator. This idea, this pursuit, so typically American, has gotten us and the rest of the world into the current economic mess we're in. Directors on corporate boards, corporate stockholders, young graduates of business schools, lawyers just out of law school, investment managers, and bankers, all subscribe to the idea that making money is the supreme goal in life.
But this is not true for all people either young or old. Take the artist for example: his or her reward is in the act of creating a painting or a sculpture or, in the case of a writer, a novel or a short story, or for a composer, a song or a symphony. Or take the scientist seeking to design a cure for a particular cancer. Watch them in action: that artist, that writer, that composer, that scientist is intensely absorbed in the creative process unaware of anything but the work itself. Where's the compensation or even the recognition? They have no idea whether it will come once their creations are exposed to the public, nor does it matter, because the very act of creation is an end in itself. That is all that really matters. Once compensation becomes the goal the work is diminished and often fails. Its falseness ultimately shines through.
Contrast with these people the corporate executive who demands being paid exorbitant amounts whether he or she fails or not. That executive's goal is in the compensation and only secondarily in the creative challenge of succeeding, otherwise if offered less no deal is possible. And who establishes such compensation? Why the board of directors, of course, who by rewarding so exorbitantly expects miraculous results because money is all that really matters. The boards therefore also subscribe as a matter of course to our materialism as the essential motivator. But not so much today's stockholder who is finally waking up to the fact that these days compensation is unrelated to performance. Unfortunately the stockholder has little clout against the inherent conspiracy of the hired executive and the board who wash each other's hands.
Regardless of our cultural imperative, I submit there are plenty of capable executives in our society who would be willing to run companies for just reasonable compensation in relation to the rest of the employees. They would do so simply for the joy and the challenge of not only improving a company's performance, but in so doing making a contribution to the nation, the world, and the community. They would become the artist, the writer, the composer, or the scientist whose creative achievement is what really matters, and is the best compensation of all. They could take pride and say of their lives that what they have done will endure far beyond them. What could be more valuable than that? Try hiring such people you boards of directors and be surprised.
posted by Hugh Aaron at 4:06 PM
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