‘When did CEOs become magicians?’
Last month, we published a column by Roger Lowenstein called “On GE and the myth of the CEO superhero,” which inspired this letter from a reader. Mr. Lowenstein, I’m old — 74 — and remember when businesses actually made something — cars, toys, bedding, tools, books, newspapers — but now they don’t seem to do anything except shuffle money around, which seems like a kind of shell game to me.
And investors invested in companies because they believed in the product and wanted to support it, be a part of it — now they want to milk it dry. They are indifferent to the success or failure, the continuation, of the business as long as they get money out of it.
The only econ course I’ve ever taken was 101, 55 years ago, but this seems like a deeply, fundamentally unsound system to me, one that is hollow to the core. Nothing is being produced, created, manufactured, nothing of value results. When are we going back to producing something that means something to somebody, that somebody cares about, besides money for investors, that is?
And when did CEOs become magicians, or gods who walk on water? There must be some kind of weird, self-serving corporate culture that supports their ridiculous pay, especially since, as you point out, 98 percent of them are ordinary mortals who rose through the ranks of the company. I think that CEO pay should be indexed to some reasonable multiple of that of a line worker. And as most of us, except for those in the corporate culture, know by now, people work far more effectively for intrinsic, rather than extrinsic — pay — motivations. Apparently to those making these decisions, science is not relevant here. While I agree with you that CEOs are not responsible for market conditions, I would think that really competent ones would be able to anticipate them, would be able to look five or 10 years ahead and see that digital cameras are going to eliminate the need for film, that robots are going to replace humans on the assembly line, that coal is too dirty to burn in a warming world. The CEOs of Ford and General Motors should have been able to see the popularity of foreign cars, because of their smaller size, improved fuel economy and better design, and realize that they needed to make some changes. Isn’t that part of a CEO’s job? Keep it up, Mr. Lowenstein — there are plenty of bubbles that need to be burst. Laidler Campbell, Springfield, Va.