17 April 2006

$400 million?

So now we read (ABC News Story) that Exxon is giving Lee Raymond one of the most generous retirement packages in history, nearly $400 million, including pension, stock options and other perks, to include a a million-dollar "consulting" deal, two years of home security, personal security, a car and driver, and use of a corporate jet for professional purposes. Exxon pocketed $36 billion last year, but even so, four-hundred million is a honkin' big piece of the pie. Of course, Libertarian types (I'm thinking of Glen, here) ask us, "Why do we have such resentment over companies making profits and individuals making money?" The problem is that people don't "make" money. In a perfect world, money serves as a reward for the productive labor that has created wealth. So what's wrong with this picture?

First, the idea that one man waving the baton, conducting the orchestra, is somehow responsible for the lion's share of the sounds omitted from the instruments is ludicrous. As a person who has engaged in quite a bit of productive labor (in spite of my efforts to avoid it at all cost), I can tell you that the people who form the cogs in the machinery of any large enterprise do a helluva lot of back-breaking work that is just as essential (actually, much more essential) than anything the CEO does. Now I realize that there can be only a few people at the top and that someone must do the dirty work. We will always need managers. But doesn't this large payment completely undermine the legitimacy of the current model? In this case, one member of a collosal multinational company is being paid over 1% in profits! A great number of people (especially those hired in Africa) probably don't make in a year what this fatcat makes while chewing a single bite of a doughnut.

Even if we were to accept the fantastic premise that some chubby guy in an office had single-handedly produced the entire productive output of a small nation, we'd be left with an inconsistency; namely, that the current market forces that determine prices fail to account for a large group of stakeholders. In addition to the people who live in the countries where the oil's being depleted and those affected by the pollution, there are the unborn billions who soon will be born into a world lacking an adequate petroleum supply. Such a world may, out of necessity, place a higher premium on the actual contributions of people in the productive process. The Lee Raymond story will hopefully be relegated to those back pages of history. Future students can wonder (as we so often wonder about our ancestors now), what in the hell were they thinking?!

7 comments:

Pisces Iscariot said...

I know I shouldn't judge a person by the way they look...
but jeez, this guy looks as if the worms are about to burst out of his face.

Karlo said...

My theory is that he's an alien species that is slowly taking over our corporations.

neal said...

But doesn't this large payment completely undermine the legitimacy of the current model?

you hit the nail on the head here. kudos. i find it interesting to see salary packages of all things illustrating major flaws in the market mechanism. no real economic sense belies a move to reward an individual this much money. as you point out, cheif raymond is walking away with over 1% of the annual spoils of the most profitable listed company in the world. i mean, what the fuck is that? if anything, it should be a slap in the face to the shareholders of exxon. this story boggles the mind more than it inspires indignation.

Tetsuo said...

I say we tap his neck for oil.

Karlo said...

Now this is an idea. Perhaps we can bury him and the other CEOs in the Nevada desert to create a new oil field for our ancestors a million years from now.

Nehring said...

"I can tell you that the people who form the cogs in the machinery of any large enterprise do a helluva lot of back-breaking work that is just as essential (actually, much more essential) than anything the CEO does."

Nearly anyone can learn and function on an assembly line. There are few people who can run a huge corporation. Is $400 mil a buttload of cash, yeah. Is he worth it? Dunno. Corporations like this one and others rake in a great deal of dough and guys like flubber neck here do work to make sure those cogs have someplace to go in the morning.

Oil companies are making a great deal of money. The markets in China and India are doing well for them. The people who broker the deals and penetrate those markets and therefore keep the companies running should be compensated for the effort. Is it the same as digging a ditch? No. Is it vital, yes. Can anyone walk up and do it? Nope. Thus the higher value.

$400 mil is a buttload of cash though.

Anyway, thought I would drop by and breakup the love fest over here. Too many people agreeing.

Still love the site.

Karlo said...

Leave it to you to spoil a perfect luvfest.