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Hired Help

Why Do We Worship CEOs?

by DAVID MACARAY

Things have gotten out of hand in regard to the admiration we have for CEOs. Not only do we over-compensate them, we idolize them. People complain about professional athletes being overpaid, but don’t bat an eye when some hapless CEO who earns $6 million a year gets fired for incompetence, and then collects his $10 million Golden Parachute. We act as if the relatively straight-forward concept of “the main boss” is beyond our comprehension.

I once knew the CEO of a Fortune 500 company. I shall call him “Fred.” While our relationship was tenuous and one-sided, as president of the labor union representing one of the corporation’s important facilities, I was able to maintain his attention (if not his respect) by virtue of the fact that our union was willing to go on strike at the drop of a hat. He knew it and I knew it. We had already done it twice.

Basically, Fred was a decent guy. Even though almost everything he ever told me was either disappointing or depressing, I appreciated him leveling with us, giving us the unvarnished truth, something management people were usually loath to do. Whereas most managers liked to indulge in platitudes and generalities and smarmy seminar-speak, Fred insisted on being brutally honest.

Accordingly, our final meeting was quite brutal. I had invited him to the mill to make a pitch for starting up some idle machinery. We had six production machines on the floor, but only two were running. I assured him that if they started up the other four machines, our unit cost would drop dramatically. We all knew that a 2-machine operation could never compete, cost-wise, with facilities that had their overhead costs spread over as many as 10 machines. It was simple economics.

Fred somberly noted that the reason those machines had been shut down was because they were under-performing, but I reminded him that our numbers had vastly improved. While he agreed that we had made progress, he said he had an obligation to the shareholders. As CEO, he wouldn’t be able to justify giving additional assets to a facility that had proven it couldn’t run the assets it already had. Even though I must have looked crestfallen, he asked if I had ever heard a “Newfie” joke. I told him I hadn’t.

Fred had spent time in Canada. He said that Newfie jokes were jokes Canadians told about people living in Newfoundland (“Newfies”), jokes that depicted them as being more or less simple-minded, sort of like the old “Polack jokes.” I didn’t care much for ethnic jokes, and had no idea where he was going with this, but considering his earlier comments about stockholders and additional assets, I had the distressing feeling I was going to hate it.

His joke: Two Newfies, Joe and Sam, bought watermelons from a farmer for 40-cents each. They then rented a truck, filled it with melons, parked it on the corner, and posted a sign: “Watermelons: 3 for $1.00.” At the end of the day, after selling all the melons, they found that they had lost money. Perplexed, Sam asked Joe what they should do. Joe replied confidently: “We need to get a bigger truck.”

Fred’s joke implied that if he were to green-light the start up of additional machinery, he would be behaving like a Newfie. In other words, behaving stupidly and recklessly. It was crushing news.

In 2016, that mill will have been in operation for 60 years, which, for a smoke-stack industrial site in this day and age, is truly remarkable. During that period it has not only been wildly profitable, it has used only union workers. For almost 60 years, every hourly employee in the facility has been a union member. That said, the department in question—the one with only two machines running—was eventually shut down. The stock market demanded it.

Despite being the consistent bearer of shit news, I liked Fred’s modesty. He wasn’t one of those CEOs who needed regal perks—the helipad, the country club membership, the limousine. Moreover, he gave credit where it was due. He freely acknowledged it was the engineers, marketing people, asset leaders and hourly workers who were responsible for our success. People need to scale back their adulation. Believe it or not, CEOs are just hired help.

David Macaray is a labor columnist and author (“It’s Never Been Easy:  Essays on Modern Labor, 2nd Edition).  Dmacaray@earthlink.net