Numbers that Numb

If I tell you that someone’s annual compensation is twenty five million it just kinda floats by and you say “so.” I’d like to add a bit of perspective to that.

Stated another way, that $25,000,000 translates to $120,192 plus or minus a few thousand per hour. How many people do you know on a personal basis that earn over $100,000 per hour.

The CEO of American Express had a salary of $25,000,000 and this coming year he has agreed to a pay cut to around $23,000,000. What a tough break. This CEO, if he is like most others, has a multi-million dollar deal, commonly referred to as a golden parachute so if he fails at his job he has a generous severance package.

So you say what difference does that make to me. If you own American Express stock and the company paid the CEO $5,000,000 per year, $20,000,000 would not have been an expense, it would have gone directly to the bottom line as profit. Oh you say, I don’t own American Express stock, ok, do you have an equity based retirement plan or a mutual fund, it is highly likely that there may be American Express shares in it.

Oh, and lest I forget, if you have an American Express card just think how many more reward points they could have awarded you if the CEO hadn’t taken such a big bite out of profits.

Tony Bos Harlingen