From now on, I am only going to buy stock in companies that have the greatest disparity between the compensation of the CEO and the compensation of the workers. Thanks to a little thing I call science, this strategy looks like a winner. Yes, I will explain.
I came across two unrelated studies that I cleverly related. In one study, researchers found that happiness makes people successful.
In another study, researchers found that sad workers are the most productive.
To summarize the studies:
Happy = successful
Sad = productive
Now, if you were to describe the job of a CEO versus the job of a lower level worker, I think you might say the CEO needs to be successful (as opposed to productive) whereas the lower level worker needs to be productive (as opposed to successful). Ideally, everyone should be both successful and productive, but in terms of importance, you would prefer a successful CEO over one who has more meetings, or however else you would measure “productivity” in that job. And a factory worker, for example, needs to be productive more than he needs to “succeed,” if success even has meaning in that sort of job.
So it follows from the science that grossly overpaying a CEO makes good sense. It allows the CEO to be happy, which increases his odds of success, which is good for the stockholders. And best of all, overpaying a CEO makes the workers sad, which makes them more productive, which is also good for the stockholders.
You often see stories in the press about CEOs who are apparently overpaid. That used to annoy me. Now I realize the genius of it. Those overpaid CEOs are buying hookers and cocaine in a valiant effort to increase their happiness, and therefore their success, which lifts all boats. And by “all boats,” I mean the boats of everyone but the workers, who need to remain sad or the whole system breaks down.
If you would like to make your loved ones or coworkers more productive, try sending them the Amazon.com link to my new book with a note that says it is terrific and you read the entire thing on the Dilbert Blog while getting paid to allegedly work. Then toss in a "neener neener." That will make them a little bit sad, thus boosting their productivity.