Viewpoints : Who Are the Most Overpaid People in America? : Some top executives, stars and sports figures make millions of dollars a year, but does anyone really deserve to earn that much?
Despite the stock market crash and economic uncertainty, some Americans made fortunes last year. The chairman and founder of Toys R Us, Charles Lazarus, took home $60 million in salary, stock options and other compensation; Lotus Development’s Jim Manzi pocketed $26 million, and Chrysler’s Lee Iacocca, more than $17 million. Does anyone deserve that kind of money? Who are the most overpaid people in America? Free-lance writer Michele Lingre raised these questions with various money-minded people, and excerpts of her interviews follow:
Ralph Nader, consumer advocate “Roger Smith (is overpaid) because he has wrecked General Motors. Jim Manzi, who runs Lotus, and Charlie Lazarus, at the head of Toys R Us, (are overpaid) because their compensation is way out of proportion. Manzi and Lazarus are hired hands who have set their salary at astronomical levels. The question is, is the head of Lotus worth 33 times more than the head of Toyota? I think it’s time for shareholder derivative suits against these executives who are wasting corporate assets.”
Irving Paul (Swifty) Lazar, Hollywood and book agent
“Generally, in the movie business, nobody is overpaid, because if they don’t produce, they are fired quickly. I don’t think the Disney executives are overpaid. They made the company turn around to the extent that it’s probably the most successful motion picture studio.
“Sylvester Stallone . . . was being overpaid insofar as when he made pictures that didn’t do well, they really died; they couldn’t overcome the immensity of the budget of his pay. But he made so much money in other pictures that I suppose (producers) are willing to take a chance.
“There may be major businesses where people do get overpaid, but how can you ever overpay Iacocca? Without him there would be no Chrysler.”
Roger Corman, film producer and president of Concord-New Horizons
“Almost everybody (in Hollywood) is overpaid, except the extras. Writers are the least overpaid. On a $2-million film--which I would consider a medium-budget film--with say, one star, the star would probably get anywhere from $300,000 to $500,000. At that price, you get a secondary star. The producer would get anywhere from $100,000 to $200,000, same for the director. The writer would probably get $50,000 to $100,000.
“I think you could cut them all in half and that would be a reasonable price. The star’s value has nothing to do with the star’s work, really. It’s an intangible based upon the producer’s belief that the star will sell tickets. Buying a star is a little like buying advertising.”
Ravi Batra, economist and author of the best seller, “The Great Depression of 1990”
“Most business executives are overpaid. Workers’ compensation has been lagging behind inflation, executive compensation has been skyrocketing even in industries where profits have fallen or losses have occurred. The worst excesses occur, I think, among the brokerage firms.
“This rising wealth concentration in the end will bring about a depression. This is exactly what happened in the 1920s. If there is a depression in the near future, as I have predicted in my book, the blame will have to fall on the greed and conceit of the rich people in America.”
Albert Lee, author of a book on General Motors’ Roger Smith titled, “Call Me Roger”
“In Detroit, there is more frustration over Roger Smith’s $2 million than there is over Lee Iacocca’s $17 million. In Chrysler and Ford, workers have received significant profit sharing. In General Motors, they have not received any, even though they have been promised it. At the same time, the executives have received significant bonuses each year.
“Roger Smith’s stress has been both on numbers and the belief that you produce high technology to eliminate people. The result has been that, without a marketing man or a product man at the helm, GM has produced look-alike cars and has lost its market share. Without a people person at the top, the motivation and reward system in GM has gone to hell. He has disrupted tens of thousands of lives without commensurate benefit of any kind.”
Clayton Roberts, vice president of National Right to Work Committee
“In light of the poor representation provided by the union hierarchy, it would certainly appear that a great many union officials are overpaid. The rank and file of American workers has no say in determining what the salary of a union official shall be. You are compelled as a condition of employment to pay dues to the union officials, and that money may be used for a variety of causes that many of the workers might disagree with: anything from political, social, and ideological campaigns, to loaded salaries for union officials.
“I am not saying that Lane Kirkland isn’t worth his six-figure salary, but that question should be determined by the union rank and file. Unfortunately it is determined by the union hierarchy.”
Mary Hatwood-Futrell, president of the National Education Assn.
“I’m a Washington Redskins fan, and I see a linebacker, Wilber Marshall, just signed a contract for $6 million. Or take Dave Winfield, a New York Yankees outfielder, who has a contract worth $22 million. Then, teachers in this country, who educate everyone, have a beginning pay of about $18,000. After 15 years of experience and earning a master’s degree, the average pay for 1987-88 is $28,000.
“When I look at what teachers have to do and what some other people have to do, it seems that things are grossly out of whack. Athletes have to put in enough hours to develop their skills and be able to play the game and win. But teachers put in an average of about 56 1/2 hours a week. We don’t have a season that goes from August to January; our season is from September to June.”
Calvin Griffith, former owner of the Minnesota Twins major league baseball team
“Certainly the ballplayers are overpaid. They say they only have a short (career), but the way I look at it, the ballplayer’s work is what he has brought through the gate. To be a star, a ballplayer has to be a personality and produce on the field, so people will enjoy coming out to see him. There are not too many ballplayers of that stature. A fellow like Babe Ruth or Sandy Koufax, Bob Gibson, Ted Williams, Stan Musial, Pete Rose--they are entitled to a lot of money. . . . Jim Rice, with the Boston Red Sox--he’s way, way down in hitting and everything else, and he’s getting over $2 million a year.”
