Wednesday, 4 February 2009

Strictly Business: Makers & Takers

I just saw that President Obama has tacked on a $500,000 pay cap for the CEOs of businesses receiving federal bailout money. His critics are calling this a political ploy, and it probably is, but it does bring up an important issue in the business world: Executive salaries.

As my guest blogger Christian Bale tried to tell you yesterday, CEOs are getting paid huge salaries that more often than not have nothing to do with their job performance or the financial health of their company. And that's not counting the massive amounts earned in bonuses, stock options, and other perks. In many cases, especially in Hollywood, these CEOs are literally sucking the life out of the companies they are supposed to guide to prosperity. Everybody's getting screwed out of their share of the profits, and in some cases, massive multibillion dollar strikes can be averted for the cost of one CEO's salary.

Now before you start thinking that this is going to be some sort of crypto-Marxist polemic calling people to raise the black flag, man the barricades and break wind in the palaces of the mighty while all wearing grey overalls. This isn't one of those.

In fact, I don't really see a problem with a CEO earning big money.

However, the keyword is "earn."

You see there are two types of people in business: Makers, and Takers.

A maker earns money by making money. This is an act of creation, it is literally the taking of that proverbial economic pie, and making it either bigger, or making a whole new pie. A maker creates wealth, spreads it around, which increases the all around economy, and lo and behold, increases the maker's personal wealth as well. This is because businesses run by Makers, tend to grow, and grow, and grow.

Takers can only see the proverbial pie as finite, and then try to take all of it for themselves. This is an act of destruction, draining wealth from the general economy, and using every trick in the book, and some they just pull out of their ass, to keep things exactly the way they are. And while they may believe that they are "winners" by acting this way, they are in fact limiting at best, or sabotaging at worst, their own success and personal prosperity. This is because Taker-run businesses may have short runs of success, but ultimately shrink, or end up chopped up and the pieces sold.

Makers build successful businesses, while Takers run them into the ground for their own aggrandizement.

So I guess you could sum up that I'm saying that the business world needs more Makers, and a hell of a lot fewer Takers.

1 comment:

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