Are CEOs Underchallenged?

Pay Ratios Barely Scratch the Surface

Whole Foods CEO John Mackey wrote about executive pay in the US for Harvard Business Review a few months ago, noting that, “back in 1965 the ratio between CEO pay and average company pay was 24 to 1. By 1980 the ratio had increased to 40 to 1. The ratio tended to increase every year, and in 2000 it had increased to 300 to 1.”

Is it just me or is 300:1 a startling ratio in a classless society?
Mackey continued, ”Surely the market demand for good CEOs is no greater today than it was 45 years ago or 25 years ago.

Are CEOs today really worth that much more than their comparable peers were worth just a few decades ago?

It’s also illuminating to consider how much American CEOs get paid relative to CEOs in other countries. Mishel’s study shows that the average American large-company CEO makes on average 225% more than the average large-company CEO in the other 13 largest industrial countries. Are American CEOs really that much more valuable than CEOs in other industrial countries?

We are left to wonder. Are we destined to live with a perpetual disconnect between those who take home the $300 and those who take home the dollar? Al Lunsford’s post here on The Middle Class at Risk raises the stakes for business people seeking the kingdom of God. It leaves me wondering if what we’ve lost, or let slip away, isn’t the sense of community that organizes peaceable societies.

An InsideWork® friend sent us an impassioned reflection on the brokenness he feels — indeed sees — on the streets of his U.S. city:

…the physical ugliness of the cracking paint and broken windows, the rundown buildings and the despair on the faces of the hundreds of homeless and addicted wandering aimlessly on the sidewalks. The vividness of the poverty, addiction and pain framed by the peeling facades of the welfare hotels gives one the sense of a literal hell on earth. A place and people without hope, abandoned by a city awash in affluence.

…the block after block of depressed landscape is what overwhelms and discourages. A wasteland of the dispossessed and forgotten – people made in the image of God? How to reconcile the dissonance? It is almost too much to comprehend, too big a problem to solve. Sixth Street embodies in every way possible the concept of spiritual desolation taken to its visible extreme.

A quarter-century before he became British prime minister, Benjamin Disraeli captured some of the same feeling in a novel:

‘It is a community of purpose that constitutes society,’ continued the younger stranger; ‘without that, men may be drawn into contiguity, but they still continue virtually isolated.’

‘And is that their condition in cities?’

‘It is their condition everywhere; but in cities that condition is aggravated. A density of population implies a severer struggle for existence, and a consequent repulsion of elements brought into too close contact. In great cities men are brought together by the desire of gain. They are not in a state of cooperation, but of isolation, as to the making of fortunes; and for all the rest they are careless of neighbours. Christianity teaches us to love our neighbour as ourself; modern society acknowledges no neighbour.’

‘Well, society may be in its infancy,’ said Egremont slightly smiling; ‘but, say what you like, our Queen reigns over the greatest nation that ever existed.’

‘Which nation?’ asked the younger stranger, ‘for she reigns over two.’

The stranger paused; Egremont was silent, but looked inquiringly.

‘Yes,’ resumed the younger stranger after a moment’s interval. ‘Two nations; between whom there is no intercourse and no sympathy; who are as ignorant of each other’s habits, thoughts, and feelings, as if they were dwellers in different zones, or inhabitants of different planets; who are formed by a different breeding, are fed by a different food, are ordered by different manners, and are not governed by the same laws.’

‘You speak of —–’ said Egremont, hesitatingly.

‘THE RICH AND THE POOR.’  — Sybil or The Two Nations. Benjamin Disraeli, Page 65

British historian Tristram Hunt [1] reports that Disraeli rode this theme all the way to No. 10 Downing Street, putting the Conservative Party in office after an protracted absence.

Our friend in the city is not seeking a political kingdom:

Jesus’ words at the very inception of his ministry: “The Spirit of the Lord is upon me, because he has anointed me to preach good news to the poor. He sent me to proclaim FREEDOM FOR THE PRISONERS AND RECOVERY OF SIGHT FOR THE BLIND, to release the oppressed, to proclaim the year of the Lord’s favor.”

He was talking about Sixth Street and its inhabitants (as well as you and I). His ministry prioritizes redemption and liberation where it is needed most and where people are desperate. Sure, Jesus would come to our “seeker-sensitive” outreaches further up the hill with the nice Chardonnay served, but I have a feeling he would spend even more time hanging out on Sixth Street. He seems to always gravitate to where people are aware of their brokenness with no props or pride to gloss it over.

. . .

What would it be like if Christians took on Sixth Street? (Let’s put to the side the shocking fact of how little we ARE doing currently, CityTeam and other impactful ministries aside). What if God raised up a group of followers to “redeem” Sixth Street block by block, building by building and person by person from Market Street all the way down to the 280 onramp? Not to create a Disneyland, but a livable, economically vibrant NEIGHBORHOOD renewed both in sight and in spirit. A restored and healed community. Sight to the blind, prisoners set free? . . . What if we began praying about this earnestly, believing Jesus’ words that “if you have faith and do not doubt . . . you can say to this mountain ‘Go throw yourself into the sea,’ and it will be done. If you believe, you will receive whatever you ask for in prayer.”

Yes, what if we prayed? What if we paid attention to what’s going on out our own windows. And what if we held each other to account — from the loading dock to the executive suite — for a bottom line measured by more than dollars?

The biblical texts are silent on recent business innovations like CEOs and Directors and their salaries, benefits and fees. We are left to extrapolate from what they do talk about. But where to begin? How about this for starters:

What does God require of you, the prophet Micah asked rhetorically, before answering his own question: but to act justly, to love mercy, to walk humbly with your God (from Micah 6:8).

Wouldn’t that be a challenging template for a 360º performance evaluation?

Does our CEO act justly?

. . . love mercy?

. . . walk humbly with God?

What’s the evidence for this—and is this or is this not good for business?

Show us CEOs who will take on that challenge and we’ll bet you’ve shown us business leaders whose earnings no knowledgeable observer will challenge.

[1] Los Angeles Times, August 15, 2004, Opinion, page M.5

Posted by Jim Hancock on February 5, 2010

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Comments

  • Comment Author
    David Rupert
    Feb 5, 2010 9:47 am | #

    I tend to shy away from class warfare. It has a way of seeping into politics and fueling a mob mentality.

    But — companies should be more consistent with what they do. Thanks to the information age and the Internet, employees know what the boss makes. And it really rings hollow when he’s making 20 million and the line worker can’t get a box of pens.

    David
    Red Letter Believers
    http://www.redletterbelievers.com
    "Salt and Light"

  • Comment Author
    Jim Hancock
    Feb 7, 2010 9:28 am | #

    David, I think you’re wise to shy away from class warfare, and I hope you don’t infer from my tone that I do not.

    My question here is primarily directed to business leaders—including board members—not because they may be “caught” by economic illiterates who don’t understand what an executive is worth in the marketplace but because all of us are responsible to the God who says,

    You have hoarded wealth in the last days. 4 Look! The wages you failed to pay the workers who mowed your fields are crying out against you. The cries of the harvesters have reached the ears of the Lord Almighty. 5 You have lived on earth in luxury and self–indulgence. You have fattened yourselves in the day of slaughter. You have condemned and murdered the innocent one, who was not opposing you. — James 5:3-6

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