POLITICAL BOOKNOTES
POLITICAL BOOKNOTES In Search of Excess: The Overcompensation of the American Executive. Graef S. Crystal. Norton, $19.95. As the smoke clears on the eighties, Drexel’s Michael Milken...
...CEOs earn 16 times the average prole’s wage...
...As a result, in the 60 years between 1895 and 1955, the number of historic houses increased from 20 to over 1,000 Kammen, a Pulitzer Prize-winning historian who teaches at Cornell, brings great resources to his study...
...But Kammen’s material is so rich that the three or four instances he may give of a particular trend or development seem almost arbitrary...
...Studies are also made of every conceivable indicator of a company’s health, from earnings per share growth to cash flow, in order to justify a CEO’s salary...
...In 1860, William Cullen Bryant, an advisor to Abraham Lincoln, cautioned: “Make no speeches, write no letters as a candidate, enter into no pledges, make no promises...
...Gil Troy...
...The use of soundbites, polls, and negative advertising, pundits say, have conspired to “trivialize American democracy...
...This is not pretty...
...It’s far too long in that its central themes-how myth emerges from memory, the essential dualism of the way Americans view history, the ideological uses (and abuses) of myth and memory-get submerged in the many, often fascinating examples of how we have perceived our past...
...It’s the very fact of personal involvement that makes the perception of history on the individual level crucial...
...And Crystal, a Berkeley professor, has written an important book on businessmen whose money lust remains unchecked...
...Mystic Chords of Memory draws on political, intellectual, and social historyeven art history (the book is profusely illustrated...
...All well and good, but would the strategists change their ways, too...
...Troy argues that there was, in fact, a golden age of campaigning, the period from 1896 to 1944...
...Ed Rollins summed up the consensus: “I think until such a time as [the American public] rejects the negative commercials . . . and says ‘What is it that you’re all about?’ and ‘What is it that you’re going to do when you are leading this country?’, the campaign manager is going to continue to do what he has to do to win...
...The real problem stems neither from flaws in American political or cultural structure, nor shallow candidates and venal consultants...
...But while these two are among the most famous examples of CEOs scarfing up unfathomable millions, Crystal, once a compensation consultant himself, argues that the abuses they represent have become institutionalized...
...Indeed, one of the central (and surprising) aspects of how we as a nation have responded to our national heritage is that not until the thirties did governmentrather than individual citizens or private groups-emerge as the driving force in historic preservation...
...History” here isn’t so much what happened as how we choose to remember what happened...
...Since the first truly popular presidential campaign, when President Martin Van Buren battled for reelection against William Harrison in 1840, Americans have found campaigns “too lengthy, too costly, too nasty, and too silly,” Troy writes...
...Thus, 1988’s numbing and “superficial” focus on character was not a disturbing aberration, Troy writes, but “a return to the Founding Fathers’ republican notion that good character was the most important requirement for a good president...
...Japan...
...Crystal reports that there are CEOs who like to compare the pittance they make to the earnings of a Jack Nicholson or a Jose Canseco...
...handlers and photo opportunities...
...Kammen’s use of such jargon and slang as “tradition orientation” and “people with clout” is jarring...
...This was almost entirely owing to the New Deal...
...Plato once told Aristotle that no one should earn more than five times the pay of the lowest-paid worker in the community...
...In fact, as Kammen makes plain, it’s also an old question-one with a lengthy (and wonderfully tangled) provenance...
...And in contrast to Japan, the American ethos is to reward individual achievement...
...Last year, Time Warner Inc.’s chairman, Steven Ross, got a cool $78 million after Time Inc...
...Those symbols could be as abstract as a national anthem (something America did not possess until 1931), as concrete as Colonial Williamsburg (the renovation and marketing of which Kammen devotes considerable space to), or as extended as the Civil War centennial (“one of the oddest, most prolonged, and often strained commemorations in American memory...
...Could we return to such a “golden age...
...Free Press, $22.95...
...Yet at the same time, it’s hard to think of another country that has made such a fuss over its heritage and symbols-the red-white-and-blue hand of the past...
...Lincoln replied, “I appreciate the danger against which you would guard me...
...Instead of mounting a traveling air show that hit three media markets per day, they wrote lengthy letters outlining their policies, views, and intentions...
...Because the presidency melds the ceremony of a king with the pragmatic politics of a prime minister, candidates struggle to be both of the people and above them-a truth that’s brought countless upperclass patricians posing with pork rinds...
...So, while Americans may not be prisoners of the past, we certainly have been cheerleaders for it...
...It wasn’t until well into the 19th century that we gave much sign of putting a civic value on the “past...
...Stockholders are now stuck paying the remainder of his $18.3 million contract to his heirs...
...Then, as now, Americans wanted candidates to discuss issues that would shape the nation...
...While companies should pay the big bucks to hang on to effective managers, it’s not exactly an arms-length negotiation when Steve Ross tells his insider-stuffed board that he desperately wants to hold on to Steve Ross...
...Which leads us back to the ultimate players in America’s presidential campaigns: the voters...
...It involves a sense of memorable individuals, of pivotal events that caused permanent alterations in a community, of the texture of human relationships where threads are broken and the fabric is subsequently restitched...
...After the consultant, who is beholden to the chairman, picks a number, the findings go to the generally friendly board of directors...
...Greed, however, is free and thriving...
...More significantly, this book is both far too long and nowhere near long enough...
...took over his company...
...Mary Billard See How They Ran: The Changing Role of the Presidential Candidate...
...In 1912, an embittered William Howard Taft and Theodore Roosevelt described each other in such lofty terms as “puzzlewit,” “fathead,” “egotist,’’ and “demagogue...
...Even Forbes magazine, a perennial defender of greed, recently questioned this practice, asking if such “strange boardfellows” can fairly represent shareholders on pay issues...
...As for the new insidiousness of photo ops and soundbites...
...History amply suggests that the American voter’s dissatisfaction has a cause far deeper than contemporary technological dislocation...
...And while most of the rear-platform rituals highlighted the candidates’ personalities, their schedules were built around a series of policy addresses...
...Then, as now, the agenda was simple: Get elected...
...Yet that gusto cannot conceal certain shortcomings...
...Alexis de Tocqueville’s fears that the American government would become one “grand electioneering machine” have finally come true...
...But to what extent is it an American thing...
...The national mobility made possible by the automobile broadened people’s horizons beyond the regional concerns that had previously dominated historical awareness...
...As Kammen ruefully notes, we are a people with “splendid memories and star-spangled amnesia...
...Then, as now, candidates maneuvered to avoid being pinned down...
...But in the depressed bear market of the seventies, many a chairman decided that the problem was that no one on Wall Street really knew how to value equity securities...
...It is the perceptions of tradition and the uses of memory,” Kammen writes, “not their mere existence, that ultimately matter...
...And he took the advice...
...Remember the flag-burning amendment...
...Perhaps it is time for Chrysler’s Lee Iacocca (a beneficiary of more than $43 million in stock-option gains over the past six years) to give his need-tostaycompetitive stump speech to his fellow CEOs...
...POLITICAL BOOKNOTES In Search of Excess: The Overcompensation of the American Executive...
...As Kammen reminds us, “History is not chronology for ordinary folk...
...Twenty...
...It comprises the mystic chords of memory (Lincoln’s phrase) that bind us as a nation-what we know in our bones, if not in our heads...
...Instead, they’re just the latest chapter in a longstanding struggle “to develop a popular and legitimate protocol for electing a president...
...This thinking, Crystal explains, gave rise to a curious hired gun called the outside compensation consultant...
...There’s restricted stock, a basically free share given to executives, and reload-option features, which guarantee the highest possible price for option shares...
...Why should they suffer because their stock prices were inaccurately low...
...At the same time, as they were instructed to “See America First” (a slogan coined by California booster Charles Lummis), Americans created a demand for more to see...
...Crystal tells the story about a year when Herbert Hoover made $75,000 and Babe Ruth made $80,000...
...As the smoke clears on the eighties, Drexel’s Michael Milken is walking the big yard and Salomon’s John Gutfreund is deposed...
...Even as late as 1904, the Alamo had to be purchased by a private citizen to protect it from destruction...
...Nor was 1988 unique in campaign history for its negativity...
...The “Campaign Special,” rumbling through America morning, noon, and night, displayed the nominees in unguarded moments, be it Charles Hughes running to catch his own campaign train or A1 Smith greeting early risers in his pajamas...
...One way to make people care-politically at least -is to help them understand the past...
...Soundbites, choreographed photo ops, and the Willie Horton school of advertising have existed so long because we respond to them...
...Tradition is a good thing...
...At a Harvard postmortem of that campaign, Roger Ailes, Ed Rollins, andother strategists together pondered ways to improve the process: change campaign finance laws, close polls at the same time, change media coverage, change debate formats, and so on...
...In 1924, Calvin Coolidge’s campaign spent $120,000 for a series of “nonpartisan” radio addresses over 500 stations, supplementing them with choreographed images of the candidate chopping trees and pitching hay...
...In 1884, rumors circulated that Republican candidate James G. Blaine had fathered an illegitimate son...
...From Huck Finn lighting out for the Temtory to the huddled masses washing up on Ellis Island, America has been the great good place for escaping the dead hand of the past...
...Occidental Petroleum’s Armand Hammer did nearly as well even after he kicked the bucket...
...In some cases, CEOs sit on one another’s boards...
...He clearly has great gusto for his subject, which is something he needs as he follows the intermittent course of American pastness from the early 19th century to the present...
...The latter is a nice safety net, given that, as Crystal points out, a CEO’s knowledge of his company’s long-term health amounts to insider trading on stock option plans...
...What is more astounding is the fact that this figure is up from a comparatively sane factor of 35 in 1974...
...That each chapter here might have inspired an entire book by itself is a tribute to Kammen’s ambitionbut it also lends an overall sketchiness to his work...
...How did Americans come to acquire a historical consciousness, and once acquired, how has it evolved...
...In those cases, performance is still linked to pay...
...Michael Kammen...
...The astonishing response to something like Roots or Ken Bums’s The Civil War reminds us how much the past can still galvanize us-and, more to the point, how fluid our sense of the past remains...
...In those quaint days, the debate was not how to inject “substance” into campaigns, but how “seemly” it was for candidates to go out on the campaign trail and stump at all...
...But movie stars have to make blockbusters and athletes have to win to keep pulling in superstar salaries...
...Ruth had the right answer: “I had a better year than he did...
...Believe it or not, there was a time when presidential candidates didn’t “run” but rather “stood” for office...
...Today, neither polity nor piety is doing very well...
...The remarkably sophisticated road shows that today pass for political campaigns are not a harbinger of America’s decline, according to Troy...
...FDR was fond of quoting a remark of Justice Oliver Wendell Holmes: “We live by symbols...
...And insulation from any kind of risk has led to an alarming gap between some CEOs’ pay and their companies’ performance...
...Today, however, a typical U.S...
...Crystal points out that this gives CEOs something of a stacked deck, since, for example, Nissan is not factored into the Big Three auto manufacturing comparisons...
...Mark Feeney...
...Like Ronald Reagan, the archetypal American traditionalist, we tend to cherish the past but rarely get our facts right...
...He details, for example, the growth of tourism, as well as what tourism eroded: regionalism...
...Rather, Troy argues, Americans find themselves in this jam because of a fundamental conflict the Founding Fathers failed to resolve: whether we are a democracy ruled by popular opinion or a democracy guided by a republican elite who “know best...
...Morgan updated the ratio, but held to the maxim, paying his chief executive officers no more than 20 times the lowliest worker...
...Ann Grimes Mystic Chords of Memory: The Transformation of Tradition in American Culture...
...Once upon a time, compensation packages were determined by salary and stock options, which were designed to provide long-term incentives...
...Knopx $40...
...To those of us who slogged across America with the candidates in 1988, the prospects look dim...
...Kammen never raises the rousseauean question of a civil religion, but it’s implicit in his entire enterprise...
...Germany...
...Not so fast, says Gil Troy, a McGill University history professor who examines how presidential candidates have behaved over the past 200 years...
...That sounds like a timely question, what with the ongoing debate over multiculturalism and the rewriting of history curricula...
...CEO earns a whopping 129 times the wages of the average manufacturing worker-about 150 times if the service industry is put in the mix...
...For example, Stephen Wolf, the head of United Airlines, reportedly earned $18.3 million last year, as the airline’s stock fell by 71 percent...
...Yet Kammen surveys much more than such prominent instances of venerating (and sometimes ignoring) our past...
...Take out the extraordinarily big earners like Ross, and the number still comes to $2.4 million...
...In his painstaking survey of 200 major companies, Crystal found that the average total direct compensation for those CEOs is $2.8 million...
...Although this book is no page turner, Crystal reveals a compensation system that over the years grew increasingly rigged, greased, and wired...
...In 1816, for example, the Pennsylvania legislature wanted to help finance the new state capitol in Harrisburg by selling Independence Hall for $150,000...
...With the help of these consultants, many CEOs jettisoned the idea that their performance should be tied to the market price of their stock, choosing instead to base pay demands on surveys of the loot their brethren at comparable companies pulled in...
...Fast forward to 1988: Willie Horton and flag burning...
...Abolish faxes, staged events, and high-powered image-makers, and we’ve still got the culture that made William McKinley preen for the cameras on his front porch in Canton, Ohio...
...Talented CEOs should be well paid...
...Does that mean that we’re doomed to an endless loop of bad video replays...
...According to Crystal, $2.4 million is seven times more than major Japanese companies pay their CEOs...
...Why should a ball player make more than a president...
...Even so, looking at the nation’s numbers through the lens of history shows something has gone haywire...
...So the nation has seen it all before...
...Stock options make sense, linking executive pay to what matters to shareholders...
...Troy writes, “Shall the president be a king or a prime minister, the most virtuous man or the most representative one...
...As with any management issue, there is a crucial, tedious question: What about Japan...
Vol. 23 • December 1991 • No. 12
