The CEO Pay Machine: How it Trashes America and How to Stop it

by Steven Clifford Narrated by Oliver Wyman

Overview

The former top CEO examines the scandalous and corrupt reasons behind obscene pay packages for corporate executives-and explains how this hurts all of us--and how we can stop it.*

Today, the pay gap between chief executive officers of major U.S. firms and their workers is higher than ever before-depending on the method of calculation, CEOs get paid between 300 and 700 times more than the average worker. Such outsized pay is a relatively recent phenomenon, but despite all the outrage, few detractors truly understand the numerous factors that have contributed to the dizzying upward spiral in CEO compensation.*

Steven Clifford, a former CEO who has also served on many corporate boards, has a name for these procedures and practices- "The CEO Pay Machine." The CEO Pay Machine is Clifford's thorough and shocking explanation of the 'machine'--how it works, how its parts interact, and how every step pushes CEO pay to higher levels. As Clifford sees it, the payment structure for CEOs begins with shared delusions that reinforce one other: Once this groupthink is accepted as corporate dogma, it becomes infinitely harder to see any decision as potentially irrational or dysfunctional. Yet, as Clifford notes, the Pay Machine has caused immeasurable harm to companies, shareholders, economic growth, and democracy itself. He uses real-life examples of the top four CEOs named the highest paid in 2011 through 2014. Clifford examines how board directors and compensation committees have directly contributed to the rising salaries and bonuses of the country's richest executives; what's more, Clifford argues, each of those companies could have paid their CEOs 90 percent less and performed just as well.

Witty and infuriating, The CEO Pay Machine is a thorough and incisive critique of an economic issue that affects all American workers.

Editorial Reviews

From the Publisher

"So what happened in America that so much is now lavished on the executive class? And does it matter? To the second question Steven Clifford, a former chief executive at King Broadcasting and now the author of “The CEO Pay Machine,” responds with an emphatic “yes.” The outsize income, he thinks, feeds inequality and mistrust in our democracy. In response to the first question he argues that a system of compensation has emerged over the past four decades that rewards mediocre executives by stiffing shareholders, employees and society at large."
—The Wall Street Journal

"As Clifford shows with clarity and wit, using plentiful real-world examples, the [CEO Pay] Machine has mechanically and inexorably made CEO pay escalation a mathematical certainty...Passionate, provocative, and eye-opening, The CEO Pay Machine offers a clear and informed explanation of one of the most controversial economic and ethical issues of our time, which is sure to prompt renewed debate about a topic currently at the forefront of the national conversation."
—800CEORead/In the Books

"Clifford’s book is enlivened by equal doses of whimsy and scorching rhetoric. But its main task is to pry apart the mechanisms by which companies enable CEOs to collect vast sums with little downside risk."
—Seattle Times

“[Clifford] imagines a better future—one in which compensation packages would be simplified, CEO pay would be downsized, and incentives would be properly geared toward companies’ long-term success...The issue of executive pay is sometimes dismissed with the argument that in a big corporation a few million more or less doesn’t matter. But …[distorted incentives do matter. And] as we saw in November, Americans are angry and have stopped trusting the system. [Licensed larceny in the corner office helped elect a populist demagogue to the White House]. One step to winning back trust would be to insist that CEOs be treated like other mortals."
—Fortune

"A former CEO of two corporations shatters the myths and explains the stupidity regarding astronomical salaries at the top of the business world...a well thought-out, clearly written exposé."
—Kirkus Reviews

"An englightening and refreshingly candid look at the contentious topic of chief executive compensation."
—Publishers Weekly 

Kirkus Reviews

2017-03-15
A former CEO of two corporations shatters the myths and explains the stupidity regarding astronomical salaries at the top of the business world.Clifford, who served as CEO of King Broadcasting Company and National Mobile Television, expresses outrage that boards of directors have fallen into the trap of compensating CEOs with tens of millions of dollars annually without evidence-based reasoning. The author demonstrates that corporations could pay much less and that no CEO deserves an outlandish compensation package. After tracing the evolution of compensation for CEOs and delineating the factors that lead boards of directors to approve them, Clifford offers detailed critiques of four corporations that pay their CEOs as much as $200 million annually despite mediocre results: Stephen Hemsley at insurer UnitedHealth Group, John Hammergren at pharmaceutical distributor McKesson, Charif Souki at liquid natural gas supplier Cheniere Energy, and David Zaslav at cable TV programmer Discovery Communications, who made $224 million in one year. Clifford explains the similarities (and minor differences) among the "pay machine" at each corporation, a machine that operates to the detriment of stockholders and harms morale of employees, many of whom make as much as 500 times less than the CEO. The author is especially puzzled by the myth that CEOs, most of whom are already highly motivated, require stupendously large bonus compensation to become even more motivated. Occasionally, Clifford expands his focus to tell readers how the ills of the pay machine extend beyond any given corporation to harm all of society—e.g., the escalation of income inequality between the 1 percent and the remainder of the population. The author also provides a helpful glossary to define such terms as "amortization," "golden parachutes," "realized compensation," and "stock appreciation rights." A well-thought-out, clearly written exposé marred only by some repetition of the main points.

Product Details

BN ID:	2940169498349
Publisher:	Penguin Random House
Publication date:	05/09/2017
Edition description:	Unabridged

Read an Excerpt

CHAPTER ONE
(Continues…)

---

Excerpted from "The CEO Pay Machine"
by .
Copyright © 2017 Steven Clifford.
Excerpted by permission of Penguin Publishing Group.
All rights reserved. No part of this excerpt may be reproduced or reprinted without permission in writing from the publisher.
Excerpts are provided by Dial-A-Book Inc. solely for the personal use of visitors to this web site.

---

Videos