Why Big Paydays Aren’t All Bad

I find Professor Frank's comments interesting. If larger companies are able to spend more money to hire better managers, and if Newsweek is a national company and therefore a large company, why have their managers done so poorly for them in recent years as have all print media? Are the managers paralyzed by "The Innovator's Dilemma" -Clayton Christiensen's book talks of this -and unable to migrate their revenue from print to the new electronic media?

Why can I view most of what I want to read from your magazine without paying a dime for it? (Parenthetically I am a subscriber to your print magazine for my waiting room.) Can't your managers figure out a way to mimic the Google model where they make money on ads that are associated with relevant content?

As for the enormous salaries of CEOs, I think that many doctors in solo or small group practice, who handle employees without an inhouse HR department, computers without an inhouse IT department, yet are able to keep up with the medical literature and take good care of patients would have made fabulous CEOs if that took that occupational route. Yet they are not paid anywhere near what CEOs of large firms make. Although doctor's reimbursement has slipped in recent years, the point of the comment is that the CEOs don't deserve such lavish compensation. What difference could it possibly make if you make $20,000,000 a year versus $2,000,000 a year? The average CEO used to make 25x the average worker's income per year, now it's 250x. What do we have to show for it?

The answer is, companies are getting too big. Economies of scale plateau at some point, then the companies become "too big to fail" a la AIG. Rules need to be put in place not just to regulate, but at some point to break up a lot of these large companies - a "too big to fail" test should be used as well as an "anti-competetive" test. If the company is so big that to fail would have world-wide consequences, it should be broken up.

We had a progressive income tax in the 70% range. We got rid of it do practice 'trickle down economics'. Anyone remember that?

ive heard economics professors make these pathetic arguments for years. what do ceo's do that justify these huge pays. if you run your company in the ground you deserve a retention bonus, honestly?!