A woman was taking a tour of a fortune 500 company to look at how the company worked.
First, she visited the basement to talk to the service and janitorial staff. The janitorial staff talked about their jobs and how they were to go around every so often and keep the place looking tidy. It wasn’t that difficult of a job for them and consistent work. She found out they were making $25,000** per year. She thought to herself, “that’s pretty good for services and janitorial staff within any company. That’s definitely fair.”
Next, she visited the secretaries. The secretaries were down for some chit chat. They told her all about their own jobs and responsibilities. They declared that the work was fairly easy for what they required to do, and they had a steady job that they were able to handle for the consistent hours. They had good vacation hours and were able to go home to their families and enjoy life. Afterward, the woman asked them how much they made and they stated they were making about $35,000** a year. That seemed fair to her for what they were doing.
Subsequently, she visited the employees that were responsible for making the products. They told her about their specific duties and how it related to the function of the company. They were tasked with figuring out solutions that the company could provide its customers to solve their problems. In the course of events one of the engineers volunteered that his salary was $65,000** a year. That could be boosted up over $100,000 per year as they progressed in expertise. The woman thought to herself, “That seems reasonable. These engineers have to go to school for 4 years to get a university degree. As they progress the company requires that they get further education. Yes, I could see that education level correlates with salary.”
As she is doing this, the CEO of the company walks by into his office. It is around 4 PM and the secretaries greet him. The woman nonchalantly asks them about his wherebouts. The secretaries tell her that he usually only comes in for a few hours a day most of the time to make sure the company is running correctly.
A bit later she eventually finds herself talking to some of the managers of the company. Each of these managers run teams of 5-10 engineers working on a project. They keep the group on task. They have consistent hours and are even paid overtime when they have to work extensively on projects that need to be finished by certain deadlines. The woman finally asks what type of salary they make and find out that they average a salary of $130,000** while some of the most experienced managers are making upwards of $160,000. She thinks to herself that seems really high, but I suppose they are more experienced than the engineers. Their expertise and leadership require that they should make more.
After she finishes talking with the project managers she looks at her watch. She gasps and discovers that it is 7 PM and the offices are mostly closed already. She thanks the project managers for their time, and packs her bags. She laments the fact that she wasn’t able to talk to the CEO today. However, as she walks out of the room she sees that the CEO of the company is still in his office. She wanders over and pokes her head in, and asks if she can talk with him real quick.
The CEO says sure he can chat real quick. The first thing she asks him is how much he makes. The CEO states “I make $12,900,000** as CEO of this company with bonuses included.” The woman gasps and starts freaking out. She quickly gives him a rundown that he makes 516x more than the janitors, 368x more than the secretaries, 198x more than the engineers, and more than 99x of the managers. “Don’t you think that’s unfair,” she proclaims. “Your company is super successful. You can make your own schedule! You only come in for a few hours a day and make so much more money compared to everyone else! You have so much power and so much money for so little work. That’s totally unfair. In fact, I’ve heard your case is like most companies. The CEO on average makes 380x** more than the average employee.”
The CEO chuckles and says, “Lady, they don’t pay me enough for this. The company does not pay me for what I do on a day to day basis. The value of a leader lies not in the power he weilds nor his salary. I am the one responsible to implement the vision of the company during conflict and stressful situations when crap hits the fan.” The woman has a confused look on her face. The CEO finishes packing up his things and thanks her for the chat. She mumbles out, “I still don’t understand… I can see that you have tons of extra responsibility but the compensation still seems unfair.”
The CEO has a faint hint of a smile and responds, “Whose fault is it if the company goes bankrupt? Whose fault is it that tens of thousands of people are out of a job? Whose fault is it if there is corruption in the company? It is my fault. I am the fall guy if things go badly. Do you want to be the fall guy with widespread public shame and embarrassment and be the cause of tens of thousands of people losing their jobs even if it isn’t totally your fault?”
** All salary numbers and averages based on real averages for positions in the industry.