That's almost $2000 an hour!

The Consumerist has a graph up comparing corporate profits, workers' salary, and CEO compensation. It's definitely worth the click over there to go check it out.

There has been a lot of talk about CEO compensation, especially with Ford laying off workers and then paying their CEO, Alan Mulally, $39 million for four month's work. The junior high school teacher in me says that no one's work is worth anywhere near $39 million for four months, but Ford fires back by saying that's what it takes to get the big brains running a company. Besides the fact that workers' salaries have risen 4.3% and CEO compensation has risen nearly 300% since 1990, and there's no evidence that CEO's have been doing phenomenally better work since 1990, I'm willing to call that argument bunk.

Especially considering the assumptions that go into it. First, it assumes a completely free market in searching for these corporate leaders and completely rational actor making completely rational decisions when deciding what to pay them. We know that isn't true when they're all friends and on the boards of each other's companies, giving them vested interest in inflating CEO compensation.

Second, it assumes there there's a very small pool of talented people who have the ability to run these companies correctly. But in a country of 300 million people, does Ford really expect us to believe that they couldn't have found anyone to run the company for four months for $38 million? That's a steal at a million dollars in savings! If I could only find a coupon like that for vodka....

But the silliest part of this argument is that it overlooks the incompetence of many of these overcompensated CEO's. Ford posted nearly $13 billion in losses last year, the same year it paid Mulally $39 million, the same CEO at the helm when it was passed by both Toyota and then Daimler-Chrysler to become fourth largest auto manufacturer in the United States. While Ford says that they're just restructuring right now for larger profits in 2009, we have to take that with a grain of salt. The price of their stock and level of outside investment in them depends on a sunny outlook. While this may not and is probably not entirely Mulally's fault, it does show that he is not so terrifically brilliant that Ford had to pay $39 million to get him.

But that incompetence might be the goal. Mulally would receive nearly $28 million if the corporation went bankrupt. Yup.