This morning I read a piece from the Wall Street Journal comparing the pay of CEOs with various athlete-actor-musician celebrities.Basically, the article, in the form of an infographic, suggested that the top people in each category make a ton of money and that the non-CEOs tend to make more. It prominently displays Howard Stern at $90 million a year with Robert Iger, CEO of Disney at $65.7 million. That’s a lot of money, any way you slice it.
Actually, I have a thought on describing large sums of money. We should say that Stern makes 3 MREs per year, while Iger is just north of 2 MREs a year. An MRE, of course, is not a military field ration but a Mueller Report Expense. The Robert Mueller special counsel investigation reportedly cost American taxpayers $30 million. That’s roughly a dime for every one of us.
Howard Stern’s 3 MRE contract represents 30 cents for every American. Put that way, 3 MREs (or $90 million) doesn’t seem like quite as much.
Do these people get paid too much? To answer that, we need to consider what they add to their companies and to the economy as a whole. If Mike Trout weren’t making $35.5 million or more than an MRE, he’d not only not be drawing people to sit in the seats at Angels Stadium and not helping to sell Angels gear as he clubs home runs for the local team, he’d be helping some other team to win. Is he worth almost 1.2 MREs? That’s a question for Angels’ General Manager Brad Ausmus, who earns considerably less than an MRE each year.
I’m thinking about this question today because of the staggering number of people who hold determined positions on the pay of CEOs, athletes, actors, and so forth. Maybe you’re such a person, the sort of person who has determined opinions on these things but can’t understand that a reduced tax refund doesn’t necessarily indicate higher taxes. Here’s an apparently good but in the end irrelevant such person.
Also ask him what the federal minimum wage would be right now if it increased at the rate of CEO pay.
— Kurt Merkle (@kmerkle) May 17, 2019
And then there are people who will defend one group of high earners at the expense of the others.
This idea isn’t mine but bears repeating: We celebrate athletes, musicians and movie stars because they have talents who are in demand and whom we (in every economic status) gladly pay lots of money for (AirJordans?), but CEOs are greedy and grossly overpaid?
— David Mathieson (@mathiematician) May 17, 2019
So if you have strong opinions on these matters, then let me ask you a few questions:
- How much should the best left-handed starting pitcher in baseball earn?
- How much is enough for somebody who presence on a movie poster draws in a considerably larger crowd?
- How much is enough for someone who can keep a Walmart moving in the direction of Amazon rather than in the direction of Sears?
These people might be overpaid, but can you prove that they are and quantify by how much? If not, then perhaps you’re not ready to share such strong opinions.
If this entry doesn’t seem very Tune-My-Heart-ish, that’s by design. Wait until what I have tomorrow.