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Shakespeare on CEO Pay

I had the pleasure of sharing the stage this morning with Jack Bogle, the legendary founder and former chairman of Vanguard, one of the two largest mutual fund organizations in the world. We were in Philadelphia for a panel discussion on CEO pay sponsored by WHYY and Mercer Consulting.

The outspoken Bogle was in great form. As a remarkably courageous advocate for investors, he believes that CEO pay has rocketed out of control and remains excessive, even after recent fallbacks. He blames board of directors, shareholders, and greedy executives for the frothy excess. Even though average total pay for CEOs of large public companies has fallen to $7.4 million annually — down to 1996 levels — it is still more than 200 times that of the average American worker.

“What have CEOs accomplished over the past 20-year period?” he asked.

“Not very much. Eleven percent growth a year is what they promised. They’ve delivered about six percent a year, in an economy growing at 6.5%. To quote Shakespeare, ‘Upon what meat do these mighty Caesars feed?’ If everybody would start today with a fifty percent cut, we would begin to approach reality.”

Final parting shots: “CEOs as a group,” says Bogle, “are greatly overrated. I can say that because I’ve been a CEO, and I’ve been greatly overrated.”

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