business

The Star Tribune's annual survey of executive compensation published a week ago nurtures some respectful questions. CEOs are well-paid, that is true. But there are larger questions. How does our compensation here in the United States compare to the rest of the world -- not only for CEOs, but for all of us? And, given the contributions we are making to a lasting and wholesome world, are we worth what we are getting paid?

Average compensation has been increasing in the developing countries in recent decades. In comparison to our world competitors, where do our compensation levels fit? Can we compete with the compensation levels we have? Are we really worth what we are getting paid?

I am not a stranger to compensation questions. I've served on the boards of directors of one company or another for many years. As an outside director, I was almost always on the audit and compensation committees. I've had professional exposure to the financial community and the legal profession. Our family has had extensive first-hand experience with the medical profession. And, of course, I am quite familiar with compensation levels in my own profession of education.

But, there are other exposures. Two of our five children have served extensively in Africa -- in some of the poorer countries. Another spent time in Asia. I've taught several times in South America and also in Eastern Europe. We have friends in organized labor who are concerned with declining wages and increasing unemployment. Other friends have thoughtfully studied world economies from an academic perspective. Still other friends have been caught in the vortex of a shrinking and less competitive economy. All of these exposures stimulate questions of how much we, as citizens, should take from the system.

No one wants to change

The case could be made that excessive compensation is eroding our competitive strength. There are many facets to this erosion. Excessive bonuses on Wall Street, higher-than-necessary fees for professional services, retirements of people in their mid-fifties, too much time off and payment for work not actually performed -- all raise societal costs and contribute to the erosion of our nation's competitive edge.

Most discussions of our current economy sidestep this important question of compensation. Analysts commonly focus on the cyclical aspect of the economy but not the structural. We keep wondering when the economy will turn around, but no one seems to want to modify their own behavior to help with this transition. We all want to receive our own personal expectations. Whether we deserve the prosperity we have experienced is a question that's seldom explored.

There are, however, ramifications to compensation levels above what we truly deserve. Inappropriate compensation levels tend to spread -- to the just and the unjust. People begin to question, if this mediocre individual is paid so much, what am I worth? Is there any connection between a possible nurses strike and the $102 million compensation awarded to the CEO of UnitedHealth Group or some of the compensation elsewhere in the health care system? I do not know, but perhaps the question should be explored.

Vow of poverty

Last year, I ran into Sister Generose, the last Sister of St. Francis to serve as president of St. Mary's hospital in Rochester -- now part of the Mayo Clinic. A wing of St. Mary's, one of the largest and most respected hospitals in the world, is named after Generose. We talked briefly about management in the health care industry. She remarked that the mother house was never too interested in executive compensation. It is amazing what motivation, and what accomplishments, can co-exist with the vow of poverty.

It would be a grave injustice to assign too much of the blame for America's accelerating, but unwarranted, compensation to the CEOs. First of all, some of them are behaving responsibly. I met with one last week, a CEO of a well-regarded company listed on the New York Stock Exchange. In spite of no corporate debt, there will be no bonuses this year. But the morale of both workers and the management team remains high and the company's strong reputation for quality has allowed them to put more people back to work.

There are many responsible, dedicated, thoughtful and community-minded CEOs. To the detriment of our country, there are others who appear to not be worth what they are getting paid.

But shouldn't we all wonder if we're taking too much from the system?

Do we truly deserve to retire in our mid-50s? Do those of us in education really merit months of vacation in the summer along with breaks at other times during the year? As service providers, are our hourly rates appropriate? Do those of us who are managers operate with enough efficiency to justify our pay?

Perhaps both Europe and the United States should ponder the consequences of fueling highly compensated societies with money borrowed from poorer nations. The problems of our weakened economy are not cyclical, but structural.

Prosperity is unlikely to return until we are willing to change our ways. We cost too much, borrow too much and deliver too little.

If we could each make some modifications in our own behavior, so the return on investment of our own activities is positive, there would be a far better chance that our nation could return to the prosperity that has made life better for so many people in the past.