This Just In: CEOs Are Rich

Yes, it's that season again. Once a year, the folks at TheWall Street Journal publish their bit on CEO bonuses, and this year's numbers will give the U.S. press plenty of headline fodder. Here's the rub: CEO bonuses are up 46% to a median $1.4 million. These stories have no trouble in stirring up a measured dose of outrage because those compensation numbers are so, well, outrageous. It really is enough to make you grab a pitchfork and torch and join the rabble for a run at the Bastille, or some American capitalist equivalent.

A familiar whipping boy, Disney's (NYSE: DIS  ) Michael Eisner pocketed a fat $7.25 million in cash alone. Hewlett-Packard's (NYSE: HPQ  ) ex, Carly Fiorina, picked up a meager million and a half bucks, with a third of it coming just a month before the board gave her the old heave-ho. Can you believe it? A measly million-five for bringing Gwen Stefani onto the HP design team? No wonder my mental picture of the typical HP exec is all gray desk and crewcut.

But really, how do you get to a point where the $4.4 million median CEO compensation is 160 times the average earned by American production workers? There's an easy answer for that. You have their salaries and bonuses set by a small circle of other elites -- you know, the kind of folks who think personal use of the company jet and $50,000 car are the right of everyone who's joined the club. And shareholders complain about union demands?

As part-owner of the company it is not only your right but also your duty to come to an opinion on these handouts. That's why, if I owned shares of a firm like SCO Group (Nasdaq: SCOXE  ) , I'd want to know why CEO Darl McBride was getting such a nice compensation package for running the firm right into the ground.

If I owned Boeing (NYSE: BA  ) , I'd wonder whether giant pay packages aren't more harmful than helpful. Certainly millions upon millions of dollars thrown about the Boeing boardroom did little to discourage the unseemly behavior that led to the downfalls of CEO Philip Condit and soon-to-be jailbird and ex-chief financial officer Michael Sears.

Should we really be surprised when some executives, whose pay follows a completely different set of rules, actually start to feel like they're above the rules in other matters? I'll leave that one to the philosophers.

What's the right price for a good CEO? It's your decision, Fool. Download those proxy statements to see who's getting paid what. Then download the financials and see what they're doing to earn it. Don't be afraid to feel OK if your company is doing well and rewarding management accordingly. But don't be too proud to bail if things look terribly out of whack. You may not be able to change the salaries and bonuses at the top, but if you think they're wrong, you don't have to let them be paid with your money.

And remember, there are CEOs out there earning every penny they're paid. Chances are, those companies are the right places to put your investment dollars.

For related Foolishness:

Seth Jayson is willing to pay up for quality goods, but he's not going to ask the goods what they think they're worth. He's going to decide for himself. At the time of publication, he had no positions in any firm mentioned. View his stock holdings and Fool profile here. Fool rules are here.


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