Many Americans may dream of catching up with the Joneses, whoever those symbolic Joneses may be. The conventional wisdom behind that old adage is that those folks have it good; they've probably achieved the American dream.
However, if the Joneses in question are some CEOs, the typical American had better gear up for some healthier habits and maybe hire a pill wrangler to track the dosage of allegedly immune system-boosting, life-extending supplements. That's because it'd take 3,489 years to catch up.
Expensive minutes, loaded hours
According to the Associated Press, the typical American chief executive officer received $9.6 million last year. Some rather atypical CEOs banked far more. The AP targeted Simon Property's
It's easy to say, "Whoa, that sounds completely over the top" without having much to compare it to, but the Associated Press gave some valuable context to ponder.
Minimum-wage workers might as well forget making such a sum in their lifetimes. It would take them about 9,000 years to take home what Simon made in a single year. As for Americans making the median income, they'd face a 3,489-year slog to rack up Simon's one-year pay.
The AP also gave some additional food for thought. If Simon worked a 60-hour week, his pay would come out to about $44,000 per hour, or $732 per minute. Does that sound reasonable to you -- for any worker?
By comparison, the median CEO's $9.6 million payout last year sounds far more reasonable. Or is it? If you make the national average salary, you'd have your nose to the grindstone for 244 years before you'd rack up that sum. Unless any of these CEOs are making the big bucks to develop an elixir that extends our lifespans, it's not really feasible for many Americans.
The public at large may simply hinge on how wrong it all sounds, but shareholders have even more reason to weigh the consequences of such outrageous pay packages. Given the minute-by-minute breakdown and the reality of any human being's productivity, I'd venture to guess shareholders foot the bill for some pretty darn expensive CEO bathroom breaks at some companies.
Shareholder votes, CEO choices
Granted, Simon Property shareholders rejected the company's CEO pay policies in their say-on-pay vote. Last year's over-the-top "retention plan" pay isn't even the only outrage in this case; the company planned to boost Simon's pay over eight years' time, and most believe the board doesn't plan to back down despite shareholders' displeasure.
Simon Property's not alone this year in enduring the public shaming when a majority of shareholders vote against CEO compensation policies. Citigroup
It's a good sign that more shareholders are voting their displeasure. Hopefully, boards of directors will get the message that crafting and condoning insane pay isn't going over well with reasonable investors who care about their capital and the long term.
Furthermore, more investors need to ponder what good leadership really is. I'd argue truly good leaders make decisions that occasionally have to do with ethics more than their own narrow self interest. It's not impossible to make such choices, and occasionally some leaders do.
Shareholders should appreciate the gestures that executives make that go against today's conventional wisdom: that CEOs should take whatever they can get, and never think twice about whether those pay packages are fair or reasonable to shareholders or other stakeholders.
I'll take the reality check, please
Keeping up with -- or catching up with -- the Joneses won't really make anybody happy. However, the outrageous reality disconnect that shows itself in many CEO pay packages should make everybody pretty unhappy, particularly shareholders whose capital is used in unreasonable, even lunatic, ways.
Let's not worry about keeping up with the Joneses. Keeping up with reality is what we should all focus on now, and the reality is, insane CEO pay needs to be brought back to reason.
Check back at Fool.com every Wednesday and Friday for Alyce Lomax's column on environmental, social, and governance issues.