America: tops in sycophancy again!

One of my favorite newsstory genres is the always tricky report about the pelf being swallowed by that cute class of mediocrities we so fondly call upper management. Compared to the American oligarchs, the French nobility even during its dimmest hours looks like an orb of intelligence. True, the French nobility inherited their wealth and never, during their lifetimes, did much of public benefit, besides hiring the right managers. But they had a code, they flung themselves into the problems of love, conversation, and enlightenment, and they did have the common sense to commit collective suicide during the early days of the French revolution.

But don’t expect 18th century radicalism from the newspapers, that school of sycophancy and conventional wisdom. They believe that our modern oligarchs have godlike powers. They “cut.” They “build”. If a company’s stock grows by 100 percent during the tenure of X, well surely it must be due to X! The logic, here, is behind that of the 18th century – more like the 12th century faith in the power of demons and saints. However, the newspapers draw the line at extending their indulgent romanticism – for instance, I have never read a business column that suggested cashiers should get to pocket 10 percent of their ‘revenue’. Why, there’s no correspondence between what the cashier does and the line that forms behind her!

We have to know when to be 12th century and when to be 21st century if we are going to keep our neo-feudalism going.

And so we come to a delightful story on the fortunes doled out to media CEOS. As you might expect, in tough times, we really have to tighten our belts. We have to fire. We have to cut back. And we have to --- well, give 50 percent more to our beloved CEO! Its fun, and it is only money.

“Top executives at the country’s largest media companies continued to reel in multimillion-dollar pay packages in 2009, a year of widespread cost-cutting throughout the industry. In several cases, the packages even increased from the year before.
At the top of the list is Leslie Moonves, chief executive of the CBS Corporation, whose pay package in 2009 totaled almost $43 million, more than twice what he made in 2008, according to an analysis by Equilar, anexecutive compensation research firm.
Not far behind was Viacom’s chief executive, Philippe P. Dauman, who was paid nearly $34 million, a 22 percent increase over 2008. Sumner M. Redstone, who controls CBS and Viacom, was paid more than $33 million from the two companies combined.”

These things are pleasing to the Lord – pull out your average economist and he could get starry eyed, explaining it all. The wonders of the system! The rewards accruing to the just! The only fly in the ointment is this dang deficit hanging over everyone – why, it might turn out that the government will start coming in and asking for .01% more from our superior class, which would be an injustice on the scale, as one conservative activist put it, of the Holocaust.

This genre of story always presents two sides: the side of the rich investors and the side of the rich management. The two sides that count in this fair principality.
But I am always impressed by the abject lyricism of the defenders of Big Wealth. And this article ends with a cherry for me!

But first, here’s the rich investor point of view, which is blasé:

“The media industry did rebound in 2009 after a particularly tough 2008, but for many companies that largely meant cutting expenses, including labor costs. Overall revenue declines remained commonplace, but in many cases profits rose.
At Viacom, revenue in 2009 declined 7 percent compared with the year before but the company’s profit rose to $1.6 billion, a 29 percent increase, not far off from Mr. Dauman’s 22 percent pay raise. CBS returned to profitability in 2009 — $227 million — after a huge write-down in 2008.
“Right now, the executive compensation is not what’s driving people to invest or not invest in these stocks,” said Rich Greenfield, a media analyst at BTIG in New York. “Shareholders are more focused on the underlying growth prospects of the companies than executive compensation.”

And here’s the cherry!

“Several analysts said the shifting marketplace and uncertainty surrounding the media business could actually contribute to the large payouts, making companies even more determined to hold on to people they see as gifted executives.
“When you have an industry going through so much tumult, it puts upward pressure on pay because so many people are moving around,” said Don Delves, the president of the Delves Group, a compensation consulting firm in Chicago. “People are looking around a lot, people are moving around and there’s a concern about losing talent.””

Oh that talent! Its so… delightful!