Unjustly Overpaid?

Do you feel you’re overcompensated for what you do???

For most of the CEOs reading this, I would say you are very likely underpaid for the work, worry and effort you’ve put in to get where you are. Given that 96% of the American public do NOT have to make a payroll, they cannot possibly understand the difficulty of the task required to start, grow and run a profitable business, nor do they appreciate the risk involved in getting paid LAST as the CEO.??

That plus a giant and growing entitlement culture are just some of the reasons why there’s a ton of outrage about CEOs being paid 30x to 500x the lowest-paid worker in a company. Yet here’s something you never hear outta the same mouths crying about the CEO’s salary:??

What about our celebrities and sports figures who make high-eight-figure incomes???

LeBron James is making 1,360 times more at $47.6 million a year than the guy cleaning the toilets in the locker room, who makes a meager $35,000 on average.??

I agree that, purely on a human level, this seems unjust. I would also add that there are some companies grossly overpaying their CEOs. Case in point: Boeing CEO David Calhoun, who was approved for a $32.8 million a year compensation package right AFTER doors were blowing out of their airplanes in mid-flight and he was being rightly grilled for cutting safety features and steps to boost profits.??

All that said, the simple reality is that the argument that highly compensated people are paid “unjustly” is stupid.??

If you want to know why LeBron gets paid more than the janitor, survey all the companies and people who benefit from his performance, from the businesses that manufacture merch and run the events to the restaurants and hotels that benefit from him being on their team and performing in their city.???

I heard that after LeBron left Cleveland for Miami, he created a mini-recession in the area where businesses closed and many people lost their jobs. City revenues plummeted, which negatively impacted infrastructure maintenance, police and fire departments. Had the janitor left, nobody would have noticed.???

Bottom line, marketplace value determines pay. If someone in a key role is overpaid, it’s usually not very long before a correction is made. That’s because a job is only worth a budgeted number. If you have a great Level 1 tech, he or she might be earning at the top of the market; but if they want to get paid more, they must increase their skill level and capacity, taking on more responsibility and producing greater output. You can’t afford to double their salary merely because they work hard and are a great culture fit.???

This is what so many people who don’t run companies and aren’t beholden to making a profit fail to understand. Market forces of supply and demand, as well as value delivered, drive compensation, not a need to make a living wage, length of time working at a company or want. WE can’t go to our customers and tell them to pay us more because our employees need to make more. They pay us in direct proportion to the value we deliver, period. That’s how the marketplace works.???

A client of mine who was selling his portion of ownership to his business partner got into a huge fight over the value of the company. Naturally, his business partner wanted to undervalue the company so that he could buy it out as cheaply as possible. My client was correct in stating that the company was worth what the market would pay for it. That’s always the case. Is a baseball card of Honus Wagner worth $6.6 MILLION? Not to me…but someone paid that for it. Is a pair of “The Last Dance” Air Jordan 13s worth $2.2 million? Apparently, because that’s what someone paid for them.???

None of this is arbitrary or unjust. It’s how a free market works. It’s fair because it’s based on voluntary participation.???

I’m often told by other women I’m an inspiration because I’ve somehow managed to make it in a “male-dominated” industry. When asked how, I tell them the truth: Be so much better than everyone else in service delivery, marketing and running your business that you cannot be denied success. That’s it.???

And never forget YOUR pay, good or bad, is 100% within your control. If you don’t like it, then you need to negotiate a better deal with the boss or make a change to how you’re running the business. Find better customers, fix problems that people will pay more to have fixed, charge more for it, be more disciplined about costs and demand more from your employees and vendors.???

As Zig used to say, your raise becomes effective the minute you do.??