Mr. Shaman
Senior Member
- May 4, 2010
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Seriously!!!!!
"It was the 1970s, and the chief executive of a leading U.S. dairy company, Kenneth J. Douglas, lived the good life. He earned the equivalent of about $1 million today. He and his family moved from a three-bedroom home to a four-bedroom home, about a half-mile away, in River Forest, Ill., an upscale Chicago suburb. He joined a country club. The company gave him a Cadillac. The money was good enough, in fact, that he sometimes turned down raises. He said making too much was bad for morale.
Forty years later, the trappings at the top of Dean Foods, as at most U.S. big companies, are more lavish. The current chief executive, Gregg L. Engles, averages 10 times as much in compensation as Douglas did, or about $10 million in a typical year. He owns a $6 million home in an elite suburb of Dallas and 64 acres near Vail, Colo., an area he frequently visits. He belongs to as many as four golf clubs at a time two in Texas and two in Colorado. While Douglass office sat on the second floor of a milk distribution center, Engless stylish new headquarters occupies the top nine floors of a 41-story Dallas office tower. When Engles leaves town, he takes the companys $10 million Challenger 604 jet, which is largely dedicated to his needs, both business and personal.
The evolution of executive grandeur from very comfortable to jet-setting reflects one of the primary reasons that the gap between those with the highest incomes and everyone else is widening.
The case of Dean Foods appears to bolster the argument that executive compensation moves with company size: The profits for Dean Foods in 2009 were roughly 10 times what they were in 1979, adjusted for constant dollars. Engless compensation has averaged 10 times that of Douglas.
Its a different company today, company spokesman Jamaison Schuler said. He declined to comment further.
But back in the 70s, something was holding executive salaries back.
Harold Geneen, the president of ITT, then one of the nations largest companies, told Forbes in 1975 that while he might be worth six times as much to the company as he was making, he hadnt sought a raise.
Over at Dean Foods, Kenneth Douglas was likewise resistant to making more.
He would object to the pay we gave him sometimes not because he thought it was too little; he thought it was too much, said Alexander J. Vogl, a members of the Dean Foods board at the time and the chair of its compensation committee. He was afraid it would be bad for morale, him getting a big bump like that.
He believed the reward went to the shareholders, not to any one man, said John P. Frazee, another former board member. Today we get cults of personality around the CEO, but then there was not a cult of personality.