Dean Baker writes:
While it may be too early to make any final judgments, it will be interesting to see what happens to Circuit City's CEO. Those who say that the huge salaries earned by CEOs are justifed, argue that the returns that a good CEO brings to shareholders dwarf their salary. In this case, a CEO made a decision that not only had a very bad impact on the lives of 3,400 employees, but also may have cost the stockholders lots of money. (It is unlikely that any of the 3,400 fired workers would have made such a foolish decision, if they ran the company.)
This would actually be a fun project for some union to start up. Watch for companies that engage in large layoffs but pay the executive princely sums. Then watch the company's trajectory. If sales flatten out, and profits decline, and stock prices slip, but the CEO either retains his job or is lavished with compensatory goodies when he leaves, he'll make a nice riposte to those claiming CEO pay is perfectly fair and rational.
And yes, in-between calling for military coups and bashing liberals, some people do claim that.
