Executive View/Marshall Loeb
Where Big Money Is Made
Country music, that vivid, livid mirror of America's loves and hates, reflects a growing target: the rich. Listen to Johnny Paycheck, folk philosopher with a gritty guitar:
This ole boy, hell, I've had enough
Of the way the big man rakes it in.
The big men in some corporations are sure raking it in. April's shower of proxy statements reveals that a few fortunate chiefs are drawing record payments of salary, bonus and benefits: $1.7 million to Revlon's Michel C. Bergerac, for example, and $2.5 million to Warner Communications' Steven J. Ross. Alan Ladd Jr., the dollar scion of a departed Hollywood heman, collected $1.9 million last year as president of the 20th Century-Fox movie division, mostly in the form of a bonus for having had the shrewd sense (or good luck) to make Star Wars. Ford Motor had three men in seven figures: President Philip Caldwell, Executive Vice President J. Edward Lundy and, of course, Chairman Henry the Deuce himself.
Reports of the outsize rewards are enough to make many an inflation-straitened American sing along with angry Paycheck. But before everybody gets upset, let alone envious, it might be wise to put the large numbers in perspective. Though nobody has to pass a collection cup for the fellows who reach the top of corporate America's greasy pole, those who make big money as hired managers are a small minority. Down in the trenches, which is anywhere below the senior vice president level, the rewards are moderate and uncertain. A lot of bank vice presidents and middle managers in heavy manufacturing are lucky to crack $35,000; they commonly get a title in lieu of money.
Employees in a company might have reason to cheer when their chairman gets large rewards. Says Dudley V.I. Darling, a top executive recruiter with Ward Howell Associates: "The pay scales of people from lower middle managers up through officers are usually pegged to the salary that the chief collects." Middle managers are paid best in industries that compensate their top managers the most: cosmetics, autos, electronics, data processing, entertainment Such industries tend to be highly profitable and fast growing, and they give relatively more to employees and less in dividends to shareholders than do companies in older, slower-moving but more secure industries, such as commercial banking, utilities, heavy metals and railroads.
Everybody knows that $1 million isn't what it used to be, and it is also common wisdom that even the highest-paid corporate executives earn less than such folk idols as disc jockeys, movie and rock stars and even country music heroes; Johnny Paycheck will be good for $1 million or more this year.
Most of America's real money—the big money—goes to its small businessmen, entrepreneurs and professionals.