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A Reality Check for Corporate America |
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by Subra Narayan |
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What remains to be seen is how a private investment firm would transform a behemoth into a smooth and efficient organization over the coming years. In her book, 'The End of Detroit', Micheline Maynard argues as to why the American auto industry has undergone such upheavals. It is indeed puzzling that given the same market forces, raw material costs, labor costs and union headaches that the US automakers face, how is it that the Japanese auto makers who operate in the same level playing field, manage to stay afloat and remain healthy. In fact several of the Japanese autos are made on US soil, by American workers, sold to American consumers and without an iota of doubt, are superior in quality. While there are probably many factors that contribute to this, at least one of the factors that needs some consideration is the gap in the remuneration of the top executive relative to the assembly line worker. The New York Times recently ran a special report on executive pay stating that CEOs made around 40 times more than the average worker during the '70s, while the gap has grown to an incredible 500 times in recent years. The LA Times laments that the compensation for CEOs has skyrocketed into the stratospheric heights of pro athletes and movie stars. It further goes on to say that, 'If the minimum wage had risen at the same pace as CEO pay since 1990, it would be worth $22.61 today, according to the Institute for Policy Studies'. With mergers and acquisitions happening at breakneck speed, the top executive often comes out the winner no matter what. Robert Nardelli, the ousted chief of Home Depot, walked away with a $210 million compensation package while Henry McKinnel of Pfizer Inc left with nearly $200 million for a job well done,'. er..! Has Corporate America somehow lost its soul in the netherworlds of capitalism? |
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23-Jun-2007 | ||
More by : Subra Narayan | ||
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Views: 1826 Comments: 0 | ||
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