CEO pay

Sol Trujillo's payout when he leaves Telstra will be 93 million dollars and some of us will ask how he earned it. 93 million dollars would keep ten small theatre companies going for a thousand years on the interest alone. 93 million dollars would fund a month of the Iraq War. It's a thousand times the annual wage of a New York fireman. It's three hundred times the annual wage of Kevin Rudd. In a bank earning seven percent interest, it would make him 17,835 dollars a day. 743 dollars an hour. 12 dollars a minute. A dollar every five seconds.

Bob Ellis on CEO pay. While I agree with him I must admit that his article is a good example of why so many people don't trust lefties. He favours rhetoric over analysis when CEO pay is one of the easier areas where you can just let the statistics tell the story. It's a classic example of the myths of the market. For example, there is the argument that CEOs are paid as much as they do because the market is willing to pay them that much. Which is true. But the reason why the market is willing to pay them that much is because the evaluation of CEO salaries based on supply and demand is controlled by CEO and other high level actors in the private sector. A market can be shaped to favour certain products and services by powerful interests. One reason why American IT companies do so well is that the US state can protect their IP rights much better than weaker countries.