Reforming the rich.(on the right)(publicizing executive salaries)

NEW YORK, JANUARY 20

ON the matter of reform in publicizing executive salaries, a few observations:

The way it is being handled now is marginally inexcusable, and unquestionably disgraceful. A case can be made, using prime libertarian doctrine, that what an executive is paid is of concern to only three parties: the executive himself, the stockholders, and the employees. What stands in the way of explanations that fundamentalist is that there are means of paying these huge salaries which are substantially this side of full disclosure.

Begin with the fact that official communications from large companies are simply unreadable. Add to this that there are means of compensating executives which avail themselves of loopholes. They are a means of circumventing those strangulations by which government seeks to put its big thumb in the way of enterprise. To file corporate literature in such a way as to avoid suspicion of prejudice against women, minorities, aliens, cripples, pregnant women, or imported goods is a challenge even to resourceful corporate communications officers.

Then there is the matter of tax avoidance. The executive with this in mind gleefully disguises his compensation in ingenious ways, which have the effect of exposing to high taxation not himself, but the company that hires him--until the blessed day when he retires and scoops up his deferred compensation, plus his options of one kind or another. You don't really have the components of libertarian exchange necessary to ex-pose what he is earning so that a stockholder can weigh what is being paid for executive services. Action by the SEC designed to reveal what actually is going on is welcome.

There is a healthy reluctance to concede that Mr. Jones is really worth $5 million per year in compensation, which is what he is getting, viewed in a truly strong light. It's another matter--and this society needs to get used to it--when an individual is earning something ordained by the public itself in recognition of his uniqueness. If it is a baseball player who enchants a great public, or a chanteuse whose records sell by the millions, or an author who writes Gone With the Wind, the public should acknowledge that it has only itself to blame for egregiously high returns. But when it is the vice president of a glass manufacturer, a ...