Compensation and Capitalism

Posted: March 9th, 2009 under Economy.

 

The unending drumbeat decrying the salaries and perks paid to executives of stock held companies and financial institutions is not only infuriating but it is sinful.  Corporate leaders are paid commensurate to the performance of the company’s business and increased value of its stock.  The owners of the company (shareholders) determine the amount of profits which are paid to those who run the business on their behalf.  If they do not perform, they are replaced by someone who will make decisions and issue directive which will reduce cost while increasing productivity, increase market share, introduce new products, remove obstacles to growth in order for the company to generate as much profit as possible.  If a corporation makes an after tax profit of $100 million on sales of $3 billion (3000 million); this represents only a 3 % profit.  If the owners of the company paid the CEO $3 million in annual salary (which is already accounted for in the pretax expenses of the company) and decide to give the person an additional $1 million in bonus (1% of the profits) this leaves 99% of the profit for those who never made a decision, never negotiated any contracts, never made a sale, never cut any cost.  Jesus addresses the issue of compensation in Matt. 20.  He tells a story about a farmer who needed laborers to harvest his crop.  The farmer hired men at 6:00AM, 9:00AM, 12:00PM, 3:00PM and 6:00PM.  He offered to pay the men hired at 6:00AM, a days wages (one denarius) and to each of the other groups he offered to pay ‘whatever is right’.  At the close of the day, he told the foreman to pay the men beginning with last group to the first.  He gave each group the same amount – 1 denarius.  The men who worked from the first grumbled that they received the same as the rest although working through the heat of the day.  The owner replied to one of them (they had a bargaining agent and sent him to complain), ‘Friend, I am doing you no wrong; did you not agree with me for a denarius?  (14)  ‘Take what is yours and go, but I wish to give to this last man the same as to you.  (15)  ‘Is it not lawful for me to do what I wish with what is my own? Or is your eye envious because I am generous?’  In this story Jesus gives an example of class envy and He is against it.  When a board of directors of a corporation choose to be generous to the executives for working hard to create wealth for the owner(s); IT IS NO ONE’S BUSINESS how much they pay them.  The money belongs to the owners and it is theirs to do with as they please.  Envy (covetousness) is a sin wherever and whenever it occurs.  Socialism deceives those who do not have into thinking that if they are resentful and bitter to those who do have, that their lives will be better.   By tearing down the wealthy, not one more dollar is added to the poor.  In fact as the rich lose their wealth, jobs disappear, charities are penniless, and the truly needy are bereft of help!

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