noun 1. Excessive or rapacious desire, especially for wealth or possessions.
This week's Around The World (ATW) is about greed. Voracity, gluttony, avidity -the Germans have a great word for it "habsüchtig", from haben "to have" + sucht "sickness". It is one of the 7 Deadly Sins, but alive and well in our Capitalist system. Attached is an article from The National Post that speaks to this very issue. Rounding out the "bottom" of the list is Steve Wynn - whose name is synonymous with the Bellagio hotel in Las Vegas and the two hotels down the Vegas Strip that now carry his name. Incredibly, at a mere $28 Million -all in $US of course, is a pay check less than one-third of Mr. Rutledge of Charter Communications at an eye-popping $98M.
Nice work if you can get it. As a screaming capitalist, I am entirely in favour of a merit-based compensation model that incentivizes individuals to deliver results. But with the exception of Wynn, who did build his empire from the ground up, every other executive on this list is a manager. They deserve to be well compensated providing they deliver, but to be clear, they risk nothing in their position other than the chance that they could find themselves out of a job at some point. Not one founded any of these companies, not one put their own capital at risk, not one has brought a brilliant idea to market (like, for example Steve Jobs with the iPod/iPhone/iPad), and not one could possibly have delivered for shareholders results that would justify their egregious pay checks.
Their compensation comes directly at the expense of the shareholders -who are the owner of the companies. A complete re-think of this naked, unadulterated greed-based compensation in the form of "Say on Pay" where shareholders give thumbs up or thumbs down on top executive earnings is needed. As is pressure by large institutional Wealth Management companies who need to vote against this type of avarice. And as your Financial Advisor, I will be forwarding this ATW to the Money Managers we partner with and ask for their comments. They will be posted in a future ATW. Stay tuned!