Despite economy, executive compensation remains inflated

Are all those executives really worthy of A-level compensation?

By AMERICO DEL CALZO

June 30, 2012 at 1:14AM
Stephen J. Hemsley, CEO of UnitedHealth Group, is one of America's highest paid executives, according to Forbes Magazine.
Stephen J. Hemsley, CEO of UnitedHealth Group, is one of America's highest paid executives, according to Forbes Magazine. (New York Times/The Minnesota Star Tribune)

Counterpoint

As one who graduated in the top 95 percent of his 1955 college class, I read with some interest Chuck Chalberg's "'C' is not the first letter in 'fail'" (June 26).

During my college studies I received mostly C's, several B's, fewer A's, and a couple of F's (Calculus II and Differential Equations).

Yet, despite my lowly class standing, I have never felt that my professors' honesty in grading my work and having it appear on my college transcript prevented me from having a successful and satisfying career. Having potential employers know that I was good-to-excellent in some academic areas, yet average-to-passing or even failing in the others, was not an obstacle to finding a job immediately after graduation.

More important, my self-esteem was not damaged knowing that those in the top 5 percent of my graduating class were a whole lot better than I was academically. I accepted it for the reality it was.

As I reflected on the fact that we -- our nation and its students -- are being duped by the grade devaluation described in Chalberg's piece, I came across a June 27 Star Tribune front-page article titled "Best Buy prepares to fight founder." That article cited the large cash and stock awards being made to retain Best Buy executives -- ostensibly to keep the "best and the brightest."

This appears to be another example of the now-universal notion that institutions have to pay extraordinary compensation in order to retain excellent executives. Like its equivalent, grade devaluation, this pattern, I suspect, is another area in which we are being duped.

When all executives are getting A-level compensation, do they all deserve it? I'm guessing not. The reality is that most of them are very likely C-level performers who should be receiving a lower grade of compensation.

But, alas, we seem to have embraced grade devaluation and inflated executive compensation. And although each may be beneficial to the individuals involved, I cannot see how they do the rest of us any real good.

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Americo Del Calzo is retired in Minneapolis.

about the writer

about the writer

AMERICO DEL CALZO