Big smiles and then a frown

This time of year, polling seems to run rampant. Two polls caught our attention; the first dealing with CEO pay, the second dealing with retirement wishes.

When we heard about CEOs making big money and the fact that most would make more than the average wage earner by 2:30pm on Monday, we raced to work to see how that worked out for us. That’s when the frown came in – big pay is only at the public companies. Shucks.

The CEOs at these particular types of companies can make out handsomely, since their results-based pay is generally all about stock prices and quarterly results. Targets made are targets paid. The wheels however come off this train well down the road when these short-term fixes yield long-term consequences.

Through creative accounting, staff reorganizations and short-term planning, companies can be made to appear very valuable. But like many companies that travelled this path will admit after the fact, no staff often means no product or service or receivables.

CEO pay has risen over the past decade from 55 times an average worker’s salary to 154 times. Worker salaries have stagnated in that period prompting the use of that old adage, the rich keeping getting richer and the poor keeping getting poorer. It hardly seems fair.

There is little doubt we see the world a little differently than many others. That can easily be blamed on an acute sense of practicality, running a small business and growing up on a farm where pragmatism runs deep.

There is some stuff that simply doesn’t make sense; the rate of CEO pay being one of them, the second being performance-based pay that does little in the way of allowing for future growth of a business.

It’s a bit like milking a prize cow, but never feeding and caring for it to get more milk the next day. Ultimately that neglected prize cow will sell for hamburger meat, getting the same price as a poor cow. The logic escapes us, but we see this with some large companies that move resources about as if playing checkers.

Another poll trumpeted that a full two thirds of Canadians want to work after retirement, typically considered age 65. The headline should have likely been, a full two thirds of Canadians “have” to work after retirement, but that would have been entirely depressing on the second day of a new year. Instead, for social reasons and keeping a sharp mind, many approaching retirement intend to carry on doing what they are doing. The pay helps too.

We believe this acceptance of working well after retirement has much to do with the absence of meaningful pensions and adequate savings to ensure a comfortable retirement. Some talk at the federal level about pension reform has us concerned, because it means the issue is looming large.

Truth be told, this pending obligation should have been dealt with long ago, but as happens in most government circles, its reactive management rather than planned fortitude for the sake of the country.

Another factor affecting comfort in retirement is the ever increasing cost of goods and services. Food, gas, property taxes, heat, hydro – all of these things keep creeping up and without a solid retirement plan, a retiree could easily slip into the trap of using up valuable capital. It’s a tough one.

Our frown however was short-lived. What’s not to smile about?