Guidant Financial Group Blog

Are executives of mega-corporations overpaid?

Before you answer, think about how hard they work and how much money their companies earn for their stockholders. Then think about how hard you work, the contributions you make to the profits of your employer and the salary you earn. (Oops. Did we just lose you there? Did you just go screaming from the room?)

Obviously, the instinctive, response to the question of whether these execs are overpaid is “Darn right they are!” While common sense seems to dictate that employers with the multimillion dollar salaries are overpaid, it’s hard to quantify it beyond a visceral “I-feel-sick-to-my-stomach” response.

Now a salary compensation expert with advanced statistical tools has done just that (quantified the overpayment, that is, not gotten sick to his stomach . . . although maybe he did both). Graef Crystal compared the 2009 pay of 271 chief executive officers against their shareholders’ returns.

Crystal’s answer to “Are CEOs overpaid?”—according to Bloomberg News, which requested the study—is: “No matter how he sliced the data, the answer was no.” You can read all about it, along with cool, interactive graphics, at: http://images.businessweek.com/ss/10/05/0506_overpaid_underpaid_ceos/index.htm)

We all, of course, suspected this, but it’s good now to have the proof.

So what can Guidant do to help you deal with this situation? Well, honestly, other than “feeling your pain,” there’s not much . . . other than one possible thing: If you happen to work for one of these CEOs with an obscenely bloated salary, then consider quitting and going into business for yourself.  Guidant's 401k small business financing plan can help.

We can help you make it happen. And, while we can’t promise you’ll earn a multimillion dollar salary, we can promise that, as your own boss, you’ll never feel again like an underpaid underling to an overpaid CEO.