On September 9, CBS announced that its CEO, Les Moonves was out the door. The cause was a second round of accusations of sexual misdeeds.
So what if he gets fired? But what struck me about the CBS report on his ouster was this:
A financial exit package for Moonves will be withheld pending the results of an ongoing investigation into the allegations against him. Moonves was eligible for as much as $180 million if fired without cause, according to an employment contract he signed in May 2017. Recent reports indicated a potential payout in the range of $100 million.
One hundred million dollars? One hundred eighty million dollars? This is something that libertarian theory should go to work on. How can a corporation possibly assume that anyone this side of Thomas Alva Edison is worth that amount of money? And remember, in this case the skill that is being rewarded in this egregious manner is simply that of throwing darts at demographics and guessing which TV shows will turn out to be popular. How many other people could do that just as well? To put it in another way: could you get somebody just as good with an exit package of $99 million? How about $99 thousand?
How can a corporation possibly assume that anyone this side of Thomas Alva Edison is worth that amount of money?
In every walk of elite life we see this ridiculous inflation of compensation. Even colleges and universities imagine that they can’t get anybody good if they don’t pay at least a million a year, and maybe ten million. And look at the outcome. In every walk of elite life we see seamless mediocrity, or worse
My own suspicion is that there’s a cartelization at work. These people stick together, raising their salaries by insisting that they won’t get paid less than the last one that got hired someplace. But that’s not enough to explain it. The corporate hiring committees — and the boards of directors, and the big investors — need to say what the hell is going on. Is this class solidarity gone wild? The class being the “made men” of the corporate world, whose pride demands that every goon in the mob gets as much grease as he possibly can.
And wait — that’s the amount of money he was going to get if he did a crummy job and they fired him. If they wanted to get rid of him.
But hey. Please don’t tell me that in a capitalist system, people are paid according to their financial value to the enterprise that employs them. Do you think that with anyone but Les Moonves at the helm, CBS would be $180 million poorer? And wait — that’s the amount of money he was going to get if he did a crummy job and they fired him. If they wanted to get rid of him. It wasn’t his ordinary compensation. I don’t know what that is. The article I cited says $70 million a year as “take home,” but what about the income that dropped into his portfolio?
No. Explanations that are economic in the narrow sense won’t work. There’s something more going on, something that can only be explained by a libertarian sociology — or maybe a libertarian pathology.