The Top Dollar Chief Executive Officer (CEO)

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CEO is after all just another job.

“And what do you do, Chum?”

“I’m a CEO, Buster. Is that a problem for you?”

“Absolutely not. It takes all kinds. Doesn’t it?”

A person doing a job of work and critics  worry that his wages, bonuses, golden parachutes, stock deals added together are too much compensation.  As though CEOs aren’t like successful  actors, athletes, authors, sales-persons, entrepreneurs, song writers, musicians, inventors and all the other successful craftsmen whose equally high earnings are not challenged.  Okay, a few  may fail, cheat, steal; but that’s out of  all the hundreds (maybe thousands) of people in these top dollar jobs.  Doesn’t change the basic fact that all these special workers are talented, trained and experienced, and wanted.  They produce in a way that their employers could not manage to reach any other way.  In the world of money they generate earnings and surplus. Their talents are rare and they can demand and be gratefully given their heavy and overbalanced  share.

And for the vast majority of us who can’t make it big by the sweat of our brows there are the lotteries and other games of chance.  We are not overly concerned about how we rake in the money, though there are  not totally agreed upon moral limits. In the environment of advantage in and through commercial encounter within which we exist (except for the altruistic social order of our families, close kin, friends) we all usually understand and respect the successes of others. We identify.  It could, after all, one way or another, happen to us as well. Better luck next time we say to each other after the final little white lottery ball finds the number that is not ours.

Then there are  the criminals who make it big–the syndicate bosses, the illegal drug lords, the smugglers of goods and people, the grafters, embezzlers, and the like.  Some make barrels of  money. We punish them, not for their incomes (unless they are caught tax dodging) but for their immoral and illegal acts.

One could argue that once we accept the game of advantage we accept its consequences–a wide disparity of income, wildly different claims on the surplus. Big money or little money–there is always hope. Tomorrow is another day, another roll of the dice.  All else fails invent a better mouse trap, start a new industry. Buy another lottery ticket.

On the other hand we could argue that the advantage game has rules in law and administrative action that pattern the flow of surplus. There is an established bias in place and it is constantly being shaved, twisted and  revised by our political reps at the behest of lobbyists and other interested parties–so a limit on CEO income if the government intervenes in the national interest could be considered to be within  the tradition. It would be the unusual  effect of the people acting as a lobby of the whole.  Expect a lot of law suits though.

But CEOs are of even more interest to sociologists as a change in the configuration of social classes.  They are skilled employees (workers) who at the same time are executives. They enact senior cadre functions of leadership, decision, administration, supervision, planning, intelligence and research and such which traditionally are the rights and powers of the ownership class.  They are essentially assigned these tasks by the owners who theoretically could do this cadre work for themselves if they  desired. This is the reasserted unity of the owner-manager, a form that still exists today to a limited extent.  The more likely form is the separation.  The ownership is spread over large masses of people represented by mutual funds and banks and such, and even where there is a majority stock owner there is a lack of the required talent and energy.

Milovan Djilas (The New Class” 1957),  experienced in Leninist politics, saw this separation as tending toward a transformation of power and the beginning of a new socio-economic class.  In the communist setting, the ownership class is expelled and replaced by a dictatorial leader abetted by a senior council and supported by a bureaucracy of apparatchiks who act as a servant cadre–self-perpetuating and with a consciousness of its own group interests.

In Western experience the ownership function persists but now diffused and so unskilled (and unwilling to serve)  in management that a thin layer of corporate and agency senior managerial cadres (CEOs and their immediate associates)  supported by bureaucratic groupings of junior servant cadres has spread through all the firms, corporations and agencies of the society  This is the new socio-economic class in the West.

With their very high incomes this Western grouping is constantly assimilating into the ownership level.  They are self-promoted up and out.  Their retirement watch is all the stocks and bonds they accumulate which raise them up from servant to authentic boss (or at least the illusion of such.)

But the mechanism of the passing of money from owner to senior CEO worker and entourage is only partly a giving–it also has the element of private expropriation.

The legal form of control by ownership is the board of directors.    But to some extent the election of these executive supervisors is dominated by the CEOs themselves. The same people rotate between boards and executive suites and are there for each other. It is a group self-perpetuating fix. Not perfect but a similar process of class formation to that of the East. The democratic content and rhetoric is not the same though and this is an important independent factor.

So the astronomical wage packets of CEOs are in part parallel to that of other skilled professional craftspeople–based on talent, training, experience, demand, and rarity–and at the same time it is supported by the power usurpation of the emerging new class members taking catch-as-catch-can advantage of their position.

It is analogous to the situations dramatized by Joseph Losey in the movie “The Servant ” (1963)–a servant becomes dominant in his relationship with his employer.  And in Elia Kazan’s “America, America” (1963)–a youthful traveler in Turkey circa 1900 falls in with a ruffian who over time, by guile and threat, extracts the youngster’s money.   It is also similar to  the situation of the Japanese Emperor under the domination of the Tokugawa Shogunate. (1603-1868)–the powerless monarch is used as an icon by leaders of a dominant  military family. The general pattern: a dependent holder of value (individual or group)  is boxed, limited, controlled  and dominated by his (its) talented, skillful independent servant or servant class.

The high CEO income is only a sign of the value of their craft and the evolving of their new class relationship to their bosses.

There are periodic calls for a general cap on earnings.  During World War II in the USA there was a call for a limit of $25,000 a year.  Not a mass mobilizing idea so far. Congress has established a minimum wage but not a max.  Another story for another time.

And so it goes.