Some people — probably most people — ascribe entirely too much meaning to money. Especially when it comes to how much money people earn, a dangerous and destructive mindset equating money and talent laid at least part of the foundation for the current economic collapse. Today’s lesson comes, once again, from those geniuses at AIG, the gigantic insurance company whose collapse has triggered so much destruction of global capital. The same AIG that is receiving tens of billions of our tax dollars in the bailout. That same AIG is now paying millions of dollars in bonuses to various employees. Defending this payout in a letter to the Secretary of the Treasury, AIG Chairman Edward Liddy explained that such payments are necessary to keep talented staff. According to a cnn.com report, Liddy “…said the company will have trouble attracting and retaining ‘the best and the brightest … if employees believe that their compensation is subject to continued and arbitrary adjustment by the U.S. Treasury.’ “
There may be legal reasons why these bonuses are necessary — you can read all about that issue in the various articles in Forbes and Business Week and the New York Times. Note that the articles in the Times and the Washington Post have already drawn more than 1300 comments each and it’s only 3:30 pm on a Sunday afternoon! People have strong feelings about this topic.
My thoughts run in a different direction from law and policy, however, directly toward this notion that, somehow, absent a big salary or big bonus, “the best and the brightest” will go elsewhere.
AIG is not the only company that has fallen into this trap.
I sit on plenty of boards and I’m always intrigued by those who engage in a lot of hand-wringing about how we might lose this-or-that executive if we don’t pay some bigger bonus or larger salary, regardless of the intention of the executive in question. There’s a mindset, especially among folks from the corporate side, that “an offer she can’t refuse” is always lurking somewhere. The idea that someone might refuse a larger salary because he or she loves the work or is loyal to the current organization seems foreign to some of my associates on these boards.
I’m equally intrigued by school system leaders who have invented compensation plans for teachers and principals that will pay well in excess of $100,000 apiece on the theory that “the best and the brightest” won’t come for less than that. Such a plan is a big part of DC Chancellor Michelle Rhee’s plan for our schools, and the topic is hot with the union.
I’m also intrigued by “compensation consultants” who advise foundations, colleges and universities, and other organizations about how much money is necessary to “keep the best and the brightest”…. university presidents, foundation leaders, executive directors. Compensation consultants have gotten higher education into a boatload of trouble with bloated presidential salaries in a few schools (not all! definitely, not all….). Some of us reject the idea that the salaries of college presidents are a ranking system for talent.
I’m intrigued by all of the above because I keep wondering whether I missed class on that all-important day when they taught the lesson about valuing money over mission — about putting compensation above loyalty to the organization and commitment to the people served. Or maybe my schools — Trinity, Merion Mercy, yes, even Georgetown — maybe those schools didn’t have that lesson plan at all. After all, the religious women and men who founded and built the great Catholic schools of this nation were the ultimate examples of non-compensated labor, taking no salaries so that their missions could flourish for the sake of the students they educated. No yachts, no homes in the Hamptons, no Beemers for them — and they were not “lured away” by other offers!
Those of us who have succeeded the sisters and priests in these jobs in Catholic education at all levels generally earn far less than we could earn in comparable secular positions — that’s true for our faculty, for our staff, and even for me, though I’m not complaining about that, simply making this point: thousands of “the best and the brightest” people in this country do NOT equate their compensation with their talent, but rather, they willingly give their talent for the sake of service to their communities of interest, accepting modest wages while realizing other rewards, such as the sure knowledge that our students are far better for the work we do with them.
When we talk about “value-centered” education, we don’t mean the ability to recite the Catechism by heart, though that sometimes helps. Real value-centered education should teach the future workers and leaders of civic and corporate entities how to know what’s really important, how to “value” their work in service to others and the larger community. Our real compensation should be measured in how many lives we improve through our work, how many children are able to live in better homes, how many parents are able to raise their children with greater economic security, how many communities can be freed from the fear of violence that comes with poverty and ignorance.
Sure, earning a decent wage is a very important principle of social justice — economic justice is part of the Catholic Church’s core teachings, and it’s related to the dignity of human life. Earning equal pay for equal work is a related principle, especially important for women and those who have suffered historic discrimination because of racism or other forms of bigotry.
Economic justice is betrayed when giant corporations put everyone’s financial well-being at risk through pursuing compensation policies based on principles that encourage greed. The current economic mess arose in part because Wall Street gave excessive rewards to greedy behaviors — creating dubious investment instruments that appeared to make a whole lot of money for the corporation, thus also rewarding the people who created those instruments, even though the entire scheme eventually collapsed, pulling down everyone’s economic condition. People are losing their jobs because of this disaster, and other people are suffering wage freezes, furloughs and reductions in already-modest compensation.
In the aftermath of the current economic crisis, for any corporation to continue to pursue policies of extreme executive compensation is sheer madness. We need to return to the idea of work as having great meaning apart from the tangible financial reward of the job. We need to restore the idea that “the best and the brightest” invest their time and talent for the sake of achieving a great mission, not to make great money.