Jack Welch, what a guy! The former CEO of General Electric – who paid himself a fortune while slashing jobs and busting the wages of GE's workers – had an epiphany in 1995. Actually, what he had was heart-bypass surgery, which prompted him to consider his own mortality and reassess his values.
Waxing philosophical, Jack says that, upon reflection, he now feels remorse for how he had lived. What was his chief regret? "Before the operation," he says, "I didn't spend enough money. Before that I tended to buy inexpensive wine. I would never spend $100 on a bottle of wine. Now I never spend less than that."
Wow, what a deep thinker. He gives narcissistic self-entitlement a bad name.
However, there are a couple of groups that wish more of us would think like Jack: restaurateurs and wine merchants. It seems that today's economic malaise is causing consumers to cut back on their booze purchases, thus squeezing a very large and broad economic sector.
Not that people are drinking any less. In fact, the overall volume of wine, beer, and liquor sales is up – perhaps because folks feel a need to drown their economic woes. The problem is that, unlike such fat cats as Jack, customers are trading down. Instead of selecting a nice bottle of Chardonnay at the store for 20 bucks, they're going for the "two-buck-Chuck." Likewise, bars and restaurants are hurting because more people are choosing to eat and drink at home, and those who do go out are forgoing the pricier top-shelf stuff. In today's economy, the new seven-course dinner is a six-pack and a Slim Jim.
What we're relearning from America's "booze indicator" is that the trickle-down effect of the wealthy few can't sustain an economy – we need the percolate-up impact that only comes when the many are doing well.
As we're learning the hard way, CEOs are not quite the brilliant cockadoodledoos they wanted you and me to think they were.
To be fair, however, let's admit that the top honchos are astonishingly creative and bold in one special aspect of big business leadership: goosing up their own paychecks. Yeah, yeah, I know that the salary and bonuses of corporate chieftains actually dropped 6% last year, now averaging a mere $10 million. But, hey, these people are nothing if not clever, so while their pays sagged, they quietly reached into the goodie bag and increased the number and value of perks they receive by 7%.
Associated Press surveyed some 300 major corporations and found that the median value of such executive perks as chauffeured limousines, free personal use of the corporate jet, and memberships in exclusive clubs had risen to $170,000 last year. That's more than three times the income of most families!
Chauffeurs and jets turn out to be the least of it. Take Ray Irani, CEO of Occidental Petroleum. Not only was he paid $30 million last year, but he also was given $400,000 to cover the cost of his financial planners. An Occidental spokesperson explained that this perk was beneficial to the corporation because it helped Irani "keep his complete attention on the company's business." What, is Irani so flighty that he can't focus on his job without worrying about his personal money? Maybe so, but – come on – with a $30 million paycheck, couldn't he afford to cover them out of his own pocket?
Meanwhile, some corporations are concerned that these pricey and princely bennies look bad to the public. Not to worry, though – that problem can be handled by another executive perk that's increasingly popular with CEOs: bodyguards.
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