Sunday, August 29, 2010

Lives of the Rich and Famous

When I was younger, a show aired on TV, Lifestyles of the Rich and Famous (1984-95). It was hosted by Robin Leach, whose signature ending after each episode was: champagne wishes and caviar dreams. It was one of the first shows to capture the American interest in the lives of the wealthy.

Although the show is no longer running, the interest in wealthy people has not waned, but has only become more intense. Today, anyone and everyone whose has accumulated and acquired wealth becomes an instant celebrity.  That includes entertainers, athletes, and entrepreneurs. The first two, entertainers and athletes have always been in the media spotlight. From the antics of Babe Ruth, the Sultan of Swat, to Humphrey Bogart to Marilyn Monroe, the public was fascinated to delve into the private lives of these larger-than-life personalities.

It's true that some entrepreneurs, like William Randolph Hearst, were often in the news, often of their own making. But that was the exception to the rule. Most shunned the media, tending to be reclusive and uncomfortable with media intrusion. Not so today, as CEOs of large public companies see the value (read: shareholder value) into getting their names in the news as much as possible, if only to keep their companies in the minds of consumers. And, in some cases, to feed their narcissistic needs.

No Stranger to Controversy: William Randolph Hearst, newspaper magnate.
Photo Credit: US Library of Congress, 1910.
It seems evident that many CEOs have joined the ranks of the rich and famous, getting their just recognition and their just desserts, as well. Today, CEOs make about 430 times more than the average production worker in the U.S. The cumulative pay of the top 10 highest-paid CEOs in the past 15 years totalled $11.7 billion. The CEO of a large public company makes, on average, about $12.0-million a year.

The triple-digit pay ratios originate in the mid-1990s, when CEOs first out-earned workers by a 100-to-1 ratio. Back in 1965, however, U.S. CEOs of major companies earned 24 times more than an average worker, hardly the lifestyle of the rich and famous. Then, a CEO was a high-paid manager, and little more.

Today, CEOs are superstars and super-rich. Here is a list of the top-paid CEOs in the U.S. (all figures in US dollars):
  1. Larry Ellison of Oracle:  $1.84 billion 
  2. Barry Diller of IAC/Interactive and Expedia Inc: $1.14 billion  
  3. Ray Irani of Occidental Petroleum Corp: $857 million 
  4. Steve Jobs of Apple: $749 million. 
And, in  some cases, the super-wealthy of our Gilded Age have earned the media spotlight for their antics. Here are few to consider:
  • Steve Schwarzman, CEO and co-founder of the Blackstone Group, a private-equity firm, whose public image is that of an over-reaching greedy rich man who believes that he deserves not only his wealth, but ought to receive acknowledgment as a wise man, to boot. Talk about extreme hubris. (see Slate.com.)
  • Hewlett-Packard Co.’s Mark Hurd resigned as chief executive officer after an investigation found he had a personal relationship with a contractor who received numerous inappropriate payments from the company (see Bloomberg Business)
  • Mark McInnes, CEO of Australia's premium department store brand David Jones, has resigned from his multimillion-dollar job after "unbecoming" behaviour involving a female staff member at two company functions (see The Australian)
I guess CEOs have joined the lives of the rich and famous, if only to equal their antics. Where is the dignity and self-restraint we ought to expect from those part of the privileged class? The rest of us can only scratch their heads and wonder.

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