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Today, the pay gap between chief executive officers of major U.S. firms and their workers is higher than ever before—depending on the method of calculation, CEOs get paid between 300 and 700 times more than the average worker. Such outsized pay is a relatively recent phenomenon, but despite all the outrage, few detractors truly understand the numerous factors that have contributed to the dizzying upward spiral in CEO compensation.
Steven Clifford, a former CEO who has also served on many corporate boards, has a name for these procedures and practices— "The CEO Pay Machine." The CEO Pay Machine is Clifford's thorough and shocking explanation of the 'machine'—how it works, how its parts interact, and how every step pushes CEO pay to higher levels. As Clifford sees it, the payment structure for CEOs begins with shared delusions that reinforce one other: Once this groupthink is accepted as corporate dogma, it becomes infinitely harder to see any decision as potentially irrational or dysfunctional. Yet, as Clifford notes, the Pay Machine has caused immeasurable harm to companies, shareholders, economic growth, and democracy itself. He uses real-life examples of the top four CEOs named the highest paid in 2011 through 2014. Clifford examines how board directors and compensation committees have directly contributed to the rising salaries and bonuses of the country's richest executives; what's more, Clifford argues, each of those companies could have paid their CEOs 90 percent less and performed just as well.
Witty and infuriating, The CEO Pay Machine is a thorough and incisive critique of an economic issue that affects all American workers.
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Creators
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Publisher
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Release date
May 9, 2017 -
Formats
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Kindle Book
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OverDrive Read
- ISBN: 9780735212404
- File size: 1670 KB
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EPUB ebook
- ISBN: 9780735212404
- File size: 1670 KB
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Languages
- English
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Reviews
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February 13, 2017
Clifford, former CEO of King Broadcasting Company and National Mobile Television, takes an enlightening and refreshingly candid look at the contentious topic of chief executive compensation. Clifford examines the current norm for CEO pay structures, which includes short-term bonuses and long-term incentives that are typically measured against poorly defined, subjective criteria. He questions the wisdom of an out-of-control bonus system that limits an organization’s progress or induces a CEO to act in a way that may be in conflict with a company’s best interests. Instead, he advocates replacing an annual bonus with restricted stock, making the CEO a shareholder with a vested interest in the organization’s success. Other convincing and well-reasoned recommendations include prohibiting CEOs from also being board chairpersons, linking pay to internal equity, and instituting a luxury tax on excess compensation. This sound and persuasive argument holds the key to aligning CEO pay with a company’s future success, and is essential reading for board members seeking to better serve their shareholders. -
April 1, 2017
A former CEO of two corporations shatters the myths and explains the stupidity regarding astronomical salaries at the top of the business world.Clifford, who served as CEO of King Broadcasting Company and National Mobile Television, expresses outrage that boards of directors have fallen into the trap of compensating CEOs with tens of millions of dollars annually without evidence-based reasoning. The author demonstrates that corporations could pay much less and that no CEO deserves an outlandish compensation package. After tracing the evolution of compensation for CEOs and delineating the factors that lead boards of directors to approve them, Clifford offers detailed critiques of four corporations that pay their CEOs as much as $200 million annually despite mediocre results: Stephen Hemsley at insurer UnitedHealth Group, John Hammergren at pharmaceutical distributor McKesson, Charif Souki at liquid natural gas supplier Cheniere Energy, and David Zaslav at cable TV programmer Discovery Communications, who made $224 million in one year. Clifford explains the similarities (and minor differences) among the "pay machine" at each corporation, a machine that operates to the detriment of stockholders and harms morale of employees, many of whom make as much as 500 times less than the CEO. The author is especially puzzled by the myth that CEOs, most of whom are already highly motivated, require stupendously large bonus compensation to become even more motivated. Occasionally, Clifford expands his focus to tell readers how the ills of the pay machine extend beyond any given corporation to harm all of society--e.g., the escalation of income inequality between the 1 percent and the remainder of the population. The author also provides a helpful glossary to define such terms as "amortization," "golden parachutes," "realized compensation," and "stock appreciation rights." A well-thought-out, clearly written expose marred only by some repetition of the main points.COPYRIGHT(2017) Kirkus Reviews, ALL RIGHTS RESERVED.
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