High Salaries Come at the Expense of Others
The high salaries and benefits of the private sector executives detailed in the article, “Sky Is No Limit for Executive Pay” (May 26), are obscene when compared to their contributions to society--particularly in view of the hardships experienced by low-income workers in today’s economy.
Most notable are the payments, amounting to $2.4 million, made to five executives of Pacificare, the health-care organization. These overpaid individuals and their company profit at a time when poor people’s lives are sacrificed because they do not have money to pay surgeons’ fees; our high infant mortality rate (mainly due to lack of prenatal care) is a national disgrace, and people are losing their jobs and consequently their medical insurance.
Do these overpaid individuals and those responsible for these remunerations have no consciences or sense of morality?
The privatization of medical care is the most deplorable aspect of our free-enterprise capitalist system. The nation’s medical bill amounts to $2,600 per capita, per year. This is 30% of the minimum wage. The average payment to each of Pacificare’s executives is 200 times the per-capita cost of medical care.
Thus the salary of one of these Pacificare executives would pay the medical costs for about 200 people. Despite the fact that except for South Africa, this is the only country in the industrial world that does not have a national health system, there is still a large segment of the population that believes our health system to be superior to any other.
Although no executive position justifies a salary of $500,000, it is particularly immoral when such a salary is derived from insurance premiums that should be available to treat the sick.
How is executive “performance” measured? Often, chief executives seem to make more money when a firm is in decline. In a recent article about the recovery of some industries, it was noted that improvements in the bottom line were due partly to a decrease in salaries. So top executives received more compensation as a reward for decreasing the salaries of their workers. Such cost-saving methods can hardly be defined as managerial genius.
The real contributors to company fortunes are skilled technical workers, who often have advanced degrees, write the winning proposals and design the products. These are the innovators who create ideas and develop concepts. They often receive no bonuses, few perks and salaries that generally do not exceed $65,000 a year--a pittance compared to the millions paid to those in executive suites.
NORMAN F. BATES, Dana Point
