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Too Greedy for Adam Smith: CEO Pay and the Demise of Capitalism
"Too Greedy for Adam Smith" is about how out-of-control CEO pay is destroying free enterprise in America.
If a corporate purchasing manager rented office space from a cousin or crony at twice the market rate he would be fired in a heartbeat. But “sweetheart deals” that would be unethical elsewhere in the business world are the norm in the world of CEO pay, where highly conflicted boards of directors award pay packages many times the size normal free market economics would require.
"Too Greedy for Adam Smith" explains in plain English how this is more than just flawed economics. It also gives capitalism a “bad name” as voters see our corporate elite living by a different set of rules than everyone else.
Beyond paying CEOs more than they deserve, this encourages corporate behavior that has little economic purpose besides enriching management and its Wall Street enablers. Excessive one-time payoffs encourage CEOs to "swing-for-the-fences,” so that doing mega-deals where they can "take the money and run" trumps doing what's best for the company in the long run.
We need to reject the idea that excessive pay for CEOs is just a “normal” part of capitalism in the same way we refuse to accept price fixing, embezzlement and other corrupt activity. Boards of directors should be put on notice that approving such deals is a breach of their fiduciary duty, and they should be held to account through shareholder suits, SEC actions and by the press.
This issue concerns everyone – Republican, Democrat, liberal, conservative – who values free enterprise and wants to see it maintained and strengthened.
If a corporate purchasing manager rented office space from a cousin or crony at twice the market rate he would be fired in a heartbeat. But “sweetheart deals” that would be unethical elsewhere in the business world are the norm in the world of CEO pay, where highly conflicted boards of directors award pay packages many times the size normal free market economics would require.
"Too Greedy for Adam Smith" explains in plain English how this is more than just flawed economics. It also gives capitalism a “bad name” as voters see our corporate elite living by a different set of rules than everyone else.
Beyond paying CEOs more than they deserve, this encourages corporate behavior that has little economic purpose besides enriching management and its Wall Street enablers. Excessive one-time payoffs encourage CEOs to "swing-for-the-fences,” so that doing mega-deals where they can "take the money and run" trumps doing what's best for the company in the long run.
We need to reject the idea that excessive pay for CEOs is just a “normal” part of capitalism in the same way we refuse to accept price fixing, embezzlement and other corrupt activity. Boards of directors should be put on notice that approving such deals is a breach of their fiduciary duty, and they should be held to account through shareholder suits, SEC actions and by the press.
This issue concerns everyone – Republican, Democrat, liberal, conservative – who values free enterprise and wants to see it maintained and strengthened.
169 pages, Kindle Edition
Published October 17, 2015
12 people are currently reading
6 people want to read
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Displaying 1 - 4 of 4 reviews
March 25, 2020
The idea that CEO pay is an assault of the free market, I think, negates the free market. Bavaria doesn't really provide any solution to the problem he presents. If you think CEOs are being overpaid, the book will not add any value to your argument. If you think CEO pay is fine in it's current state no argument in this book will likely change your mind. Current events will tell you more about CEO pay than this book would.
March 1, 2025
A book that needs more attention
This is a book that should be read by everyone in corporate America who is not a CEO. The CEOs (and other senior executives) benefit from the current system where they get paid enormous salaries and bonuses whether they do a mediocre job or not. If the business fails rather than losing everything, like their employees will, they get a payout as well. This doesn't align with capitalism at any point.
This is a book that should be read by everyone in corporate America who is not a CEO. The CEOs (and other senior executives) benefit from the current system where they get paid enormous salaries and bonuses whether they do a mediocre job or not. If the business fails rather than losing everything, like their employees will, they get a payout as well. This doesn't align with capitalism at any point.
August 3, 2021
Here's hoping America's CEO's read and heed Steven's book as their compensation goes beyond merit or fair play. Well crafted. Stephen E. Murphy Author Havana Odyssey
November 22, 2016
Steven is an accomplished international banker and has seen up close how CEO's have fattened their envelope at the expense of employees and shareholders. I recommend this book to activist investors and hope they'll 'blow the whistle' on excessive pay - especially when CEO's underperform. I recommend this book. SEM
Displaying 1 - 4 of 4 reviews