I don't understand the hatred of CEOs that has become popular in today's culture. If a CEO has drastically increased the value of a company, why shouldn't they be well compensated? And if they are smart and savvy and able to demand an upfront contract at the beginning of their employment which gives them a sweet deal upon termination, well that's just their market value and good negotiating.
The leadership which McGavick provided increased shareholder value of SAFECO by orders of mangnitude over what he walked away with at the end of his employment. It's important to put the numbers in perspective. $28 Million seems like a lot of money to most people, but compared to SAFECO's increase in net worth, overall value, etc. $28 Million is paltry.
The politics behind this attack are motivated by and based on Marxist class warfare. By framing the issue to the average person as Mike has, and you do not, the appeal is to envy. The left hopes that the average person will somehow feel that either he or she is entitled to the same wealth or at least some of the wealth that Mike has, or that if nothing else, Mike should not get that wealth, if they don't get it as well. But, this ignores the fact that the average Joe is not a CEO, and is not capable of generating that kind of wealth for a major business.
We do not have claims on the rich. We absolutely do not. And to the extent that we let ourselves become envious of the rich is to the extent that we corrupt the morality of our own future success. I assume that those on the left who are hating Mike now for his $28 Million won't be saying the same thing about themselves if and when they come in to $28 Million in the future. If David Goldstein ever becomes rich in radio entertainment, I hope that no one villifies his wealth as he has done with Mike McGavick.
The message from the left with respect to Cantwell vs. McGavick is that it's OK to succeed. But only if that success does not exceed some vague threshold that is part determined by how much one succeeds and part determined by whether or not the left agrees with your political stance, your position when you attained that wealth, amount and type of your charitable giving, etc.
Mike McGavick is justified in his pay. This is a petty political suit and it will never ever stand up to scrutiny in a court of law. This is just timed to extract political damage.
And I might add, there is no mention of Maria Cantwell's own gains that came largely from an explosive growth in the stock market timed well with when she left Real Networks. If the left has got a problem with Mike's wealth, shouldn't there be some problem with Maria's wealth, or at least an acknowledgement of her wealth and the timing of her wealth in relation to her departure from Real Networks?
Posted by JeffB. at August 02, 2006 12:31 PM | Email ThisExactly. And that is the essential beauty of Capitalism. You don't have to just sit there and wish you could have that big house or big salary, you can actually do something about it. No so under communism, dictatorship, theocracy, etc. And to make that possible under capitalism, the government need do nothing at all, except stay out of the way of productive enterprise.
To the extent that any government actually protects individual rights, and most importantly property rights is to the extent that it has any right to exist and to the extent that it is a moral government.
The worst of the worst are the rich Democrats who despite their own wealth, still campaign for the confiscation of wealth from other rich people.
Most people are consumed and limited by either guilt or envy.
Posted by: Jeff B. on August 4, 2006 04:42 PM"And if they are smart and savvy and able to demand an upfront contract at the beginning of their employment which gives them a sweet deal upon termination, well that's just their market value and good negotiating."
Therein lies your problem - his contract only had the big payout if he was fired - not if he left voluntarily. He left voluntarily, so why does he still get the big payout?
Posted by: Willis on August 7, 2006 04:50 PMFurthermore, the payout of the rest of McGavick's package, which was far smaller than his option gain, is subject to legal minutia. I'd be willing to bet that when all is said and done, the case against McGavick does not hold up in court. The basis that the litigant represents all, or even a significant number of shareholders is false. There is no way that they will win this lawsuit, and as such it mostly amounts to political grandstanding.
Posted by: Jeff B. on August 8, 2006 11:58 AM