I remember seeing a report at the height of the financial crisis about a Japanese businessman (the CEO of a Japanese airline) who only made, say, 60 times more than his average employees (as opposed to 400 times more for American CEOs), and when his company started hurting, he gave up his salary until the company had rebounded.
I’m sure this happened in the US too, but my impression was that it was much less common at a large company like this in the US.
So, I’m curious, is that the case? Do business people in powerful multinational companies abroad act more responsibly? Do non-American CEOs make as much money as their American counterparts (say, as a percentage of company profit)?
This thread is not meant to be an attack on Americans (I am one). I’m just trying to understand whether or not there is a difference in perspective as to the idea that those with great wealth have a responsibility to those who don’t and to what extent and if there are different views as to the morality of being extremely wealthy. As usual, I’m sure that I will clarify my question more as the discussion starts.
To be clear, what I’m not suggesting is that business people abroad are selfless George Baileys. I’m just trying to get a handle on what large-scale differences there might be between the American or “Anglo-Saxon” (as my French friends tell me) business mindset compared to their analogues abroad.
The salary, including bonus, pension etc, of the CEO of the five largest Danish companies (2008, in million US dollars):
A.P. Møller-Mærsk: 3.3
Novo Nordisk: 2.6
Carlsberg: 3
Danske Bank: 1.4
Vestas: 1.9
Here are 10 CEOs of US companies who take $1 in salary. These are generally extremely rich people who are receiving or who have received lavish forms of non-salary compensation, such as stock options. It would not surprise me if some sort of non-cash compensation was at work in the instances where an overseas CEO does this as well.
I haven’t particularly noticed this trend in the UK, but then I suppose we fit into your French friend’s ‘anglo-saxon mentallity’.
There is, however, frequent hand-wringing over the salaries of CEOs of government/public sector organisations - such as those tasked with delivering the Olympic Games - and, in recent times, the salaries/bonuses of the big bank CEOs who still seem to be raking it in despite being bailed out with public money in the banking crisis.
Our politicians are pretty lowly paid. The PM David Cameron has recently frozen ministerial pay. There’s a general feeling that public sector = public service and therefore shouldn’t be a money-making exercise. People like Tony Blair get a lot of flack about making money from the post-office speech circuit. I don’t get the impression that making such money is frowned upon in the US, but I stand to be corrected.
I used to work for an educational publishing company that was headquartered in The Netherlands.
One year, when the big cheeses were positioning the company for sale, they cut off all salary raises and all employee bonuses. Nobody got jack.
Months later, during some random “town hall” meeting, one of the executives noted that almost nobody had gotten raises or bonuses. The big cheese executives in Amsterdam and London did, however, as did all the VPs at my own company (which is in Texas).
I was livid because I could have seriously used a little salary bump and I knew that none of those rich bitches were hurting for cash flow. Why couldn’t any one of them give up $1 million of their bonus so it could be distributed to the peons? (Greed, I’m guessing.)
So I don’t know how to answer the OP. In this case, it was both European as well as American executives who paid themselves fat bonuses while recommending that the rest of us eat cake.
Is that the only benchmark you want to use to measure the moral/socially responsible-meter? I don’t want to jack this thread, but when I first saw the title, I immediately started thinking of the corruption and graft that’s common in many (most?) other parts of the world, but is illegal in America (and probably other first world nations, I have no idea).
If it’s merely a matter of a lack of social conscience in taking some huge multiple of the little guy’s salary… I don’t see that as a moral matter. The US business climate seems way more capitalistic, market driven, and importantly, imbued with a sense every-man-for-them-self than Japan and Europe. I’d argue that that’s the reason we do almost 25% of the world’s GDP despite our relatively young age.
That is what I was thinking. I have never dealt with it but my FIL works for a multi-national corporation and has told me about the special ethics training they have to take in regards to dealing with those types of issues.
I agree with Mr Smashy…to me the OP is taking some behavior that s/he approves of and then saying that it’s ‘moral’. I don’t see this as an example of being ‘moral’.
Also, I’d be a bit hesitant to compare dick sizes…um, I mean salaries…for CEO’s or others in other countries as across the board equivalent to salaries in the US. For one thing, as Tom Tildrum noted, ‘salary’ is not equal to ‘compensation’, and it’s more than possible that these ‘moral’ CEO’s in other countries, paragons that they undoubtedly are, are being compensated in other ways that aren’t part of their take home pay. In addition, it’s all about the market…if a company in country A can get a qualified CEO for $X, that doesn’t mean that a similar company in country B can get one for that price. It might cost more or less, depending on local conditions.
Not to mention that the Japanese CEO gets a lot more deference in Japanese culture, which is another form of compensation. Status matters a lot to human motivation, and I doubt Confucian-level acknowledgement of social hierarchy will catch on in the US. Hence, we use money as a proxy.
I live in California, but work for a company based in the Netherlands. They certainly haven’t been more moral towards their employees than any U.S. based company.
I’m sure there is a better word to have chosen. This is something that I’m trying to flesh out, so it’s hard for me to be very clear about it.
I don’t think I’m suggesting that there is something “immoral” about being compensated several hundred times more than the average worker. On the other hand, I do intend to suggest that there is something moral or socially responsible about someone in a position of power and great wealth who makes a reasonable sacrifice that might strengthen his company and/or his community. The purpose of this question is to see if, on a some larger scale, there is a tendency in different cultures to view the balance between the individual and community good in different ways.
I am one of those people who believes (certainly not sure) that a widening income gap is detrimental to society (and thus even to those earning the wealth) on both a political and societal level. To what extent, I’m not sure. I have nothing against people earning great wealth, and I am not against thriving markets and individual freedoms. However, I do increasingly feel that there is an element of responsibility that comes with great wealth that is under-appreciated in the United States.
This is something that I’m trying to wrap my head around, which is why I come here.
I considered that, but to me, it doesn’t adequately describe the element of responsibility. That’s to say, altruism to me suggests that you are doing more than what is required of you, while what I’m struggling with is an idea that by “giving back” in some substantial way is a requirement that comes with success, because – while we talk about individuals and self-made men and women – nobody (or so few as to essentially be nobody) truly makes it on his or her own.
I really hope people won’t read too much into that. I’m talking about a societal belief in the responsibilities everyone has to his fellow citizens more than I am talking about the responsibility of the well to do to pay their taxes, for example, though that’s a part.
What is required is to pay your taxes and conform to the laws of the land. That’s pretty much it. I don’t see any over riding need to do MORE, and if I know of someone doing more than that I’m thinking the exact term is ‘altruism’.
That said, I think that you have failed to see what other people in this thread are trying to tell you…which is that the CEO’s in other countries who are making a lot less than CEO’s in the US aren’t doing it to be either ‘moral’ OR to be ‘altruistic’.
To give some examples…one reason why direct monitory compensation might be less is almost certainly taxes. People in other countries pay more in taxes, especially at the high end. So, there is little or no point in paying someone more if their taxes are just going to keep going higher…you get to the point of diminishing returns. So, instead of direct pay, a prospective CEO might take some other form of compensation that wouldn’t be taxes instead. This will probably vary from country to country. Another example would be simple market forces…if you can get a (qualified) CEO for 1/60th the price in country A than in country B, then that’s what you are going to pay. If not, then you are going to have to pay more, where ‘pay’ equals ‘compensate in some way that is acceptable to the person being offered the job’.
Altruism and morals rarely factor in, at least not on the front end. On the back end, even in the evils of the US you have guys like Bill Gates who has donated literally billions. He doesn’t have to do that…he chooses to do it. And he’s not exactly unique in this…nor is this the only time period in American history where people rich folks did this sort of thing.
Perhaps, “expected” is better than the word required.
I know I’ve been pretty vague throughout this thread, but I have made it relatively clear that my question is about differences in societal norms. So the question hasn’t been whether or not people who make less money do it because they have sturdier morals. My question has more to do with the cultural influences on business people in general in different places, not on each particular business person.
But even there, my experience in parts of Europe has been that there is more of a general acceptance of taxation because the benefits of it are quite easy to see.
I’m not saying there’s not something to what you’re saying. Yet, it might also be applicable to the position I’m trying to probe.
I think guys like Gates and Buffet are great examples. But are they outliers or the norm. I did see something about them recently getting a number of other billionaires to give away a sizeable part of their wealth.