Executive compensation and motivation

1. Two sub-claims. Some people claim the very high compensation given executives of large corporations is a necessary evil. Evil because there is something inherently unjust, grotesque, perverse, harmful about giving luxury purchasing power far beyond what anyone needs for a wonderful, fulfilled life to a few while hundreds of millions are not allowed enough for clean water, food, basic medical care, hygiene, and education. Necessary because without a system in which top executives receive astronomical salaries and bonuses : a) Productivity and hence average standard of living will be lower b) Basic freedoms will be curtailed. Vast inequities in wealth are the price you have to pay for a free society; better poverty and starvation than red. In this feuilleton I just look at sub-claim a).

2. The assumption behind a) is that extremely high compensation is a necessary condition of attracting capable people to top executive positions in large corporations. The golden carrot hypothesis. There has to be exceptionally high remuneration otherwise talented people won't take on the training for, and responsibility and hard work of, executive positions. As with many underlying assumptions behind views or positions in which people are emotionally invested as soon as you try to state the hypothesis clearly its absurdity becomes apparent. Does anyone seriously believe that most top university graduates would rather clean toilets, work on an assembly line, drive a cab, be a shop assistant, on welfare than help run a hospital, airline, automobile factory, bank, crown corporation, government ministry, or university? Can it be maintained that running a large corporation well requires esoteric expertise as difficult to acquire as brain surgery, being a concert pianist, and flying a jumbo jet combined? As Peter Cook implied in a 'Beyond the Fringe' satire : which would you rather - be a judge or work in a coal mine?

3. Sub-claim a) only seems to make sense because of a confusion between two different points about human motivation and money. The first point is that high material rewards are a powerful motivator. The second but different point is that once people get used to a high reward they may require an even higher one to remain motivated. Thus, a person receiving high compensation may be inclined to move for an even higher reward if he/she can get it. In other words, many human beings have an almost insatiable capacity for greed (or power, status, sex).
This second point about motivation and money, though, does not entail the need for extremely high compensation for top executives or anyone else (sports or entertainment stars, concert violinists, politicians, judges, doctors, lawyers, etc.) This is because there is an almost endless supply of talented capable people who are very motivated by high though not astronomical remuneration. $200,000 a year, say, may not seem that high when you have been making it for a few years. So what?! There is a wealth (sic) of people with exceptional ability and expertise to whom that $200,000 represents a fantastic inducement. If a Canadian administrator/executive/entrepreneur can double his $200,000 a year by moving to the USA, let him(her) go, and good riddance. There are lots of others not noticeably in any way inferior in qualifications, ability, expertise, enterprise, initiative, humanity, people skills, sensitivity, understanding who will gladly take his(her) place.

4. The argument for extremely high executive compensation may still seem to retain some strength because of a further confusion between being de facto top of an organisation and being the best in or for that organisation. These two are quite different. There are many documented instances of people in top positions in organisations - corporations, government, universities, banks, the military - being inefficient, incompetent, unbalanced, lackling in people skills, emotional awareness, etc. (being selfish, greedy, corrupt, tyrannical, psychopathic is another matter). Incompetent or mediocre people can get to the top because of nepotism, favoritism, religion, getting in when times were easier, being a sycophant, backstabber, etc.

5. Here those arguing in favour of, or the need for, very high executive compensation may fall back on the survival of the fittest argument. Those at the very top of an organisation must, it is said, be the best (and deserving of all they can get) because they rose to the top in open competition. The flaw in this argument is that the notion of capitalist free market open competition is a myth. The point of having power in society is to prevent open competition, to exclude others who may be smarter, more talented, shrewd, far-sighted, incisive, with deeper understanding than you from doing your job better and for less money. People who have power - the executive class, lawyers, economist/technocrats, professional associations, trade unions - continually erect artificial barriers to prevent others competing with them and bringing down their income. People fight to protect their own privileges and give their friends and family members an unfair advantage.

6. 'The bigger the reward the more the incentive.' This sounds plausible only if you think of one individual and a limitless supply of reward. But we are dealing with providing incentives/inducement/motivation for thousands of people at a time to help bring about a more prosperous, efficient, beneficent organisation (and the total reward on offer is necessarily limited). Another weakness, then, in the golden carrot hypothesis favouring colossal remuneration for executives is that it assumes a winner takes all reward provides better incentive overall than spreading the rewards around. This is highly dubious. Most talented people know it is highly unlikely they will be in the top few no matter how hard they work (you need luck, etc.) They would be more motivated by providing instead of a handful of astronomical rewards a much greater number of moderately high rewards for being in the top 10%.

7. A related weakness in the golden carrot hypothesis is the equally implausible view that the prosperity, efficiency, well-being of an organisation (corporation, society) depends wholly or mainly on having a few brilliant (perhaps ruthless) people in the top few positions.

8. In summary : even if you assume financial greed is the greatest motivator for human beings the argument for extremely high executive compensation fails. Of course the existence of great artists, writers, composers, scientists, thinkers, moral teachers, etc. shows that it is false that financial greed is the only strong human motivator.

9. Psychological basis for unreasonable beliefs. As with most social, philosophical, political, religious, moral, or aesthetic positions the basis for the view that huge executive compensation is somehow warranted, necessary, or unavoidable is emotional not rational. You can't make someone give up an unreasonable position just by appealing to logic and evidence. Perhaps those who support or condone astronomical compensation for executives of large corporations (and are not themselves executives or super rich!) do not like to admit that they are being ripped off by, are dupes of, the executive class. Many still cling to the fantasy that everyone (all 6 billion of us!) can be a millionaire. As though the planet could sustain everyone living at the level of the top 10 0r 20% of Canadians. Maybe many fear that if the compensation for top executives is limited they may be next. Someone might point out that their compensation or wealth too is unfairly and unnecessarily high (especially by world standards).

Cycling legitimacy and cycle racing

I began cycling - commuting, shopping, touring, recreation, a bit of racing - about 55 years ago in the UK. It amazes me that apparently sane, intelligent, well-informed, able-bodied, reasonably healthy people continue to prefer using expensive, polluting, difficult to park private automobiles, and sitting in traffic jams to getting around on a bicycle. The psychology underlying the hostility of many motorists and police to cyclists still arouses my curiosity. Furthermore, I remain puzzled by the fact that thousands will enter for a 10k run (or even marathon) yet you are lucky to get 40 for a bike race.

I submit these matters are connected. If cycle racing were an accepted part of school athletics cyclists in general would receive more respect. Cyclists are perceived correctly as a threat to the dominant car-cult, affluent, consumerist lifestyle, and the mindset that economic growth and jobs rather than social and individual well-being are the main political goals. However, if cycle racing were an accepted school sport it would be more difficult to dismiss cyclists as anti-social cranks/weirdos, or loutish scoff-laws. It would be more difficult to frame racing cyclists as drug addict fanatics.

To some extent cyclists have become the 'other' whom it is still acceptable to objectify, discriminate against, belittle, mock, marginalise, disempower, even hate (partly replacing homosexuals, atheists, women, ethnic 'minorities', the disabled, the lower classes as targets of/scapegoats for pent-up inner self-dissatisfaction and feelings of inadequacy giving rise to rage reinforced by false sense of entitlement and cult of victimhood). Cyclists embody for many in affluent society, in ways in which running (soccer, tennis, skiing, etc.) do not, an alternate lifestyle which questions values about which people already feel uneasy but are not yet ready to examine and modify. Cyclists take the challenge to car cult affluence/consumerism to the streets, malls, and parking lots.

I believe the conflict between West Shore Parks and Recreation and the Greater Victoria Velodrome Association for instance - over demolition of, or access to, the Juan de Fuca Velodrome in part has this underlying psychodynamic. Cycling represents low income, poverty (can't afford a car), low status, and hence is something to be feared and shunned. In addition cyclists arouse resentment. They are perceived as people who think they are superior : more educated, enlightened, liberated, healthier, greener, more independent/self-sufficient. It could be socially beneficial to present cycling and cycle racing in a different way : as something trendy/cool associated with open critical thinking, emotional awareness, and a vigorous healthy counterculture.

As a member of Greater Victoria Cycling Coalition, and BC Cycling Coalition as well as Vancouver Island Coordinator for BC Masters/Seniors Cycling Association I am committed to finding safe, fun forms of cycle racing which are attractive to average athletes (any age, female or male) looking for fitness, exhilaration, fellowship who are constrained by other interests and commitments. Also, I have founded an unusual cycling club which combines interest in cycling and cycle racing with interest in philosophy, social issues, and mental health. A cyclosophy or velosophy club you might say. One reason why I advocate cycle racing is that I have found it to be a useful aid (superior in some ways to running, swimming, or cross-country skiing) in better management of tendencies to anxiety and depression. Check out www.velociraptors.ca and bcmasterscycling.net . Apologies for my beginner's computer and internet clumsiness. Safe cycling! May 15 2009