Days after President Obama proposed a higher minimum wage for federal contractors, the New York Times called for a maximum wage for the same. The issue of a maximum wage, driven by men like Robert Reich and organizations like the Times, has arisen every few yearsfor decades. It’s easy to understand why. It’s emotionally difficult to justify a company’s president making 20 times the salary of another employee. It’s especially galling considering that low-pay employees who don’t produce value are fired, while some CEOs walk away with golden parachutes.
One reason this issue is perennial is that many Americans simply don’t know what a corporate executive does. ThinkProgress argues that executive pay is too high under an image of a boss lounging with his feet up. The AFL-CIO claims that, “CEOs should be paid as a member of a team, not as a superstar.” What they ignore is the hard work and value executives add to an organization.
Bruce Lucas, Chairman and Chief Investment Officer of Heritage Insurance, is in many ways the stereotypical corporate executive. He’s personally wealthy. His 100-man company makes $250 million in annual revenue.
Bruce’s workday starts at 6am. It’s his job to keep his thumb on the pulse of the company and deal with any hot issues. Every day he meets with every single department head, so he knows what they’re doing, why, and what their goals are. He plans overall strategy for the company. His job is 80 hours on a light week.
Nor is Bruce’s hard work unique. Some CEOs, he said, put their feet up and just work 40 hours a week. Most of them end up fired.
What sort of value does Bruce add to Heritage? He walked me through a multi-million dollar deal he made with another company several months ago. As Chairman, he planned strategy, met the other players, and negotiated the entire deal over a period of months. Planning and executing high-level deals, which can bring in tens of millions in revenue, is a big part of most corporate executives’ jobs.
Julian Adorney is a Young Voices Advocate and is majoring in English and Advertising at the University of Colorado at Boulder. Julian’s written for the Foundation for Economic Education, the Ludwig von Mises Institute, Junior Scholastic magazine, and Speak Liberty Now.
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