Oral Sex As A CBS Executive Perk? The Mind Boggles.
But isn’t Les Moonves’ compensation of $188,500 PER DAY Even More Obscene?
By David Grace (www.DavidGraceAuthor.com)
Reality, Ain’t It Grand?
From time to time reality just smacks you in the face and screams: “Hey, can you believe this?” This is one of those occasions.
The compensation to executives at public companies has reached, and exceeded, truly obscene proportions, both figuratively and literally. Something is seriously, fundamentally, wrong with the mechanism that sets America’s corporate-executive compensation.
The CBS Inquiry Into Leslie Moonves’ On-The-Job Sexual Adventures
CBS’s Board of Directors hired outside lawyers to investigate allegations of sexual misconduct by former CEO Leslie Moonves. The New York Times claims to have received a copy of the lawyers’ draft report.
Disclaimer
At this point I have to say that this is only a newspaper article based on claimed access to a draft report. I don’t know if the report actually says what the Times has reported nor do I know if the report as written is accurate. So, maybe all of these allegations are untrue.
The New York Times Article
In an article dated December 4, 2018 the Times said:
“The outside lawyers were told by multiple people that CBS had an employee who was ‘on call’ to perform oral sex on Mr. Moonves.”
“According to the draft report: ‘A number of employees were aware of this and believed that the woman was protected from discipline or termination as a result of it.’
“. . . in addition to [emphasis added] consensual relationships and affairs, ‘Moonves received oral sex from at least 4 CBS employees under circumstances that sound transactional and improper to the extent that there was no hint of any relationship, romance, or reciprocity.’”
That’s one hell of an executive perk.
Yikes!
Moonves’ 2017 Compensation
In 2017 CBS paid Moonves:
- Salary: $5.6 Million (About $107,700 per WEEK)
- Bonus: $20 Million (Another $384,500 per WEEK)
- Stock Awards & Options: $43.7 million (Another $827,000 per WEEK)
- Total Weekly Compensation: $1,319,000 per WEEK. About $188,500 per DAY.
Plus free blow jobs!
Come for the obscene salary. Stay for the blow jobs.
On the topic of executive compensation payments, a few weeks ago Nissan CEO Carlos Ghosn got himself into a little trouble when it was alleged that while he had been paid about $88 million dollars over the past five years ($17.6 Million/year; $338,500/week; $48,350/day), he had only reported and paid taxes on only about $44 million.
Normal people have to wonder why a man with tens of millions of dollars jingling around in his jeans would so desperately need money that he elected to cheat on millions of dollars in taxes.
What is the scale that you would use to measure this level of greed?
What Is The Purpose Of Compensation?
We need to be clear. Your employees are not your friends. Once someone is earning at least a living wage, you only pay them as much as you have to pay them in order to get them to do a good job, and nothing more than that.
You don’t give employees extra money or perks just to be nice to them.
Sometimes there are crucial goals that the company needs to meet that require the employee to expend extraordinary efforts. If you’re concerned that the employee may not go that extra mile without the lure of additional compensation you may offer them a bonus to motivate that ultimate level of extreme performance.
BUT, you don’t give employees perks or extra money to reward them for doing the job that they are already being well paid to do.
So here’s the question:
Shouldn’t $107,700 per WEEK be enough money to motivate Les Moonves to work his ass off?
If you’re paying someone $107,700 a WEEK and they still aren’t working really hard, is there any amount of additional money that will actually improve their performance?
On the other hand, if $107,700 per week is already motivating an employee to give it his/her all (and it damn well should be enough), is it even possible that another $50,000 or $100,000 per week could suck any more performance out of them?
Isn’t there a point of diminishing returns involved here?
If I were paying someone $107,700 a week and their attitude was, “Hey, you’re only paying me a measly $107,700 per week! If you really want me to do my best, you’re going to have to pay me an additional $384,000 per week or I’m just going to phone it in” I wouldn’t want that person anywhere near my company.
Even the slightest fragment of common sense tells us that if a hundred and seven thousand dollars a week isn’t enough to get an employee’s super best efforts then that person shouldn’t be working for you at all.
Executive Bonuses Aren’t Really About Motivating Hard Work
So, let’s get real for a moment. CBS isn’t really saying, “Les, we’ll pay you $107,700/week just to show up, make a few phone calls and then go home early. We’ll sweeten the pot with an additional $385,000/week to get you to put in a full 40 hours of mediocre effort, and then we’ll pay you an additional $827,000/week to get you to really, really work hard.”
What CBS and other public corporations are saying is:
“There are very few people in the entire world who can do a really good job running this company so we have to pay obscene amounts of money to get and keep one of these rare individuals.”
But are they right? Is that true?
Are Top CEOs Really As Rare As Great NFL Quarterbacks?
American CEOs are paid like top professional athletes.
We know there are few people in the world who can play football like Tom Brady or basketball like Steph Curry. In a world run by the principle of supply and demand their unique talents command immense salaries.
But remember, the working life of a professional athlete is usually ten years or less. They have to make their money all up front. Moreover, the physical toll taken on their bodies can mean a lifetime of pain and disability followed by early death, at least for football players.
Executives suffer none of those drawbacks.
Rating CEOs
Even more important is the fact that the abilities of professional athletes can be objectively measured. You can compare the team’s performance with and without that player. You can compare players’ stats and gauge their performance in a meaningful way. Not so much with CEOs.
Examples of highly-paid CEOs who have tanked their companies abound. Gil Amelio at Apple. Carly Fiorina at HP. Eddie Lampert at Sears. Ken Lay at Enron. It’s a long list.
You can’t validly say, “Global Widget’s profits were up 17% this year so their CEO is doing a great job” because you can almost always increase short-term profits at the expense of product quality, selling off assets, slashing R&D, maintenance and safety programs, etc.
Such short-term savings will raise profits this year but they may well end up wounding the company three or four years down the road, so an increase in short-term profits is not necessarily any indication that the CEO is doing a good job.
In fact, it may be the hallmark of a bad CEO.
Moreover, a company’s profits can be affected by a host of factors outside of the CEOs’ control — tight money, economic downturns, shortages of raw materials, international conflicts, tariffs, etc.
Beyond the difficulties of evaluating the real skills of the current CEO is the challenge of gauging the abilities of thousands or tens of thousands of people who are not your CEO.
Finding Candidates
If you’re Billy Bean you have a suite of tools available to evaluate the talent of some kid pitching for the Podunk Junior College Cougars and you’ve got a whole scouting organization dedicated to putting that kid on your radar in the first place.
If you’re chairing Colossal Corp’s CEO Search Committee you have no way to even find, leastwise evaluate, the management skills of some executive VP at Sioux City Widgets.
There could be hundreds or even thousands of people who have the intelligence, character, knowledge, creativity and personality to run your company, but you have no way of finding them, leastwise evaluating them.
Instead, you just look at existing CEOs at other companies similar to yours and then you try to lure one of them to make the jump to Colossal. But, of course, you’re going to have to offer him/her a hell of a great deal to get them to leave their current job. And then you will need to pay enough to keep them from jumping ship for an even better offer a couple of years down the road.
This game of musical executive chairs has become a vicious cycle and it continually raises the costs for every company. The costs get higher and higher and the pool of candidates gets smaller and smaller.
It’s runaway compensation stuck in a negative feedback loop.
An Executive Aptitude Test Score (EATS)?
Law schools and medical schools have long used the Law School Admission Test and Medical College Admission Test (LSAT & MCAT) to gauge an applicant’s aptitude for those careers.
The NFL has established a numerical quarterback rating system based on objective performance standards.
Why hasn’t corporate America created an intelligence/personality/common sense/creativity/ethics test for executives?
What are the best qualities of a terrific executive? What are the worst qualities of a terrible executive? It should be possible to combine monitoring of body language, eye movements, voice micro-tremors with test responses to get at least a rough CEO Rating.
See my column “A New Machine That Reads & Analyzes Human Emotions — An EReader” about the use of sensors and body-language monitoring to gain information about a subject’s personality and emotional responses to various kinds of inputs.
Combine that technology with vocational and intelligence testing and you might get some really useful insights into a person’s suitability for a given executive position.
There’s a great business opportunity right there: Create and provide occupational ratings for various management positions. What would that research cost? A hundred million? Two hundred million. That’s peanuts compared to the value of such data.
But until some clever entrepreneur actually provides corporate search committees with an Executive Aptitude Test Score (EATS) process, we will have to find another way to break this negative feedback cycle in executive compensation.
Salary Caps For Corporate America
The NFL dealt with the problem of runaway salaries by instituting a salary cap. It might be time, or actually past time, to do the same thing for Corporate America.
Maybe we should have a Salary Cap for publicly-traded corporate executives.
- What if publicly-traded corporations were barred from granting ANY stock awards and stock options to executives?
- What if public corporation bonuses were capped at 10% of the exec’s base annual salary?
- What if salaries in excess of the lesser of (1) $5 million/year and (2) one-half of one percent of the company’s gross sales had to be approved in advance by the affirmative vote of the majority of all outstanding shares, not a majority of the shares actually voting?
- What if executive compensation in excess of 100 times the Median Household Income was not tax deductible? Right now that would mean that compensation in excess of about $5,900,000/year would be nondeductible to the corporation.
No Pay Too High, No Job Too Small
You want your CEOs to receive $200 million-dollar bonuses? American business doesn’t blink an eye. It can do that.
You want your executives to receive an additional $150 million in severance pay when you fire them for almost bankrupting the company? Tish, tosh, no problem.
You want your executives to get millions in salaries, travel in private jets, drink $5,000 bottles of wine, and have teams of private bodyguards? Say no more.
Your execs want free on-demand, executive-suite blow jobs? Can do!
They deserve it, don’t they? After all, this is America where nothing exceeds like excess.
The Takeaway
Many people would consider an employer providing oral sex acts to its CEO as an executive perk as a horrible, terrible thing. I do too.
But in my book, that same company deciding that it’s perfectly fine to pay that same executive compensation of $188,500 PER DAY is even more outrageous.
In my book, that’s the real obscenity in this whole situation.
— David Grace (www.DavidGraceAuthor.com)
