Misguided political attacks on CEO pay

Misguided political attacks on CEO pay

Hostility to corporate CEOs may never entirely subside. Democratic presidential candidate Hillary Clinton, for example, has spoken about the struggles of the average American family “when the average CEO makes about 300 times what the average worker makes.” Rolling out her economic program on July 13, Mrs. Clinton promised policies that would be better for “hardworking families, not just for successful CEOs.”

Yet much would be gained if the public better understood the logic behind business leaders’ seemingly outsize compensation.

When Robert C. Goizueta took over Coca-Cola in 1980, the company was worth $4 billion. When he died in October 1997, the company was worth $145 billion. Goizueta transformed a global brand.

A few months before Goizueta died, Steve Jobs returned to run Apple Computer, the company he co-founded in the 1970s. Apple had been a highflier but was hurtling toward bankruptcy, and Jobs was brought in to fix what appeared irretrievably broken.

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