Several weeks ago I spotted a couple of articles on the internet and I want to share with you the questions that came to mind after reading them.
First, I learned from PCMagazine.com that departing Google CEO Eric Schmidt has been rewarded with a $100 million equity award that includes company stock and options. Additionally, it was announced that Schmidt, who will become Executive Chairman of Google, has filed paperwork to sell 6% of his Google shares over the course of the coming year for an estimated $334 million. Schmidt currently owns 9.2 million shares worth about $5.8 billion. In other words Schmidt is not hurting for money.
Secondly, the Washington Post reported that Viacom CEO Philippe Dauman’s 2010 compensation has more than doubled, mainly due to stock options and awards to a staggering $84.5 million.
The question I pose is, “How much is too much money?” Do the Boards of Directors of publicly traded companies have a responsibility to place some limits on the amount of money their management is paid; and do they have, beyond their fiduciary responsibilities to their stockholders, a moral responsibility to contribute excessive profits to the betterment of mankind?
I suggest that this is a complicated subject to consider, because I am opposed to individuals who make important contributions having their compensation restricted, but in essence I am doing just than when I pose the question “How much is too much?”
Here is another question to conjure, “Would it make any sense to suggest that after compensating an executive say $10 million a year that any other payments are made to charity or educational scholarships, after the stockholders have been fairly compensated?” The problem is what is fair compensation?
As you know I love this country and a democratic form of government, but I am troubled by the totally unrealistic amounts of money being paid some individuals. Many highly compensated individuals are extremely generous in their support of charity, but can and should they be expected to do more is another intriguing question. Maybe it would be prudent to just leave the subject to one’s own conscience, but it is something to consider on a cold winter night.