American Executive Pay

Bill Bonner writes today in The Daily Reckoning:

In the world at large, the difference in salary levels is shocking. At the top in Japan, the average executive earns only 3 times as much as the average salaryman. In Britain, top executives earn more than 10 times as much as their Japanese counterparts - or 39 times the average guy on the shop floor. And in America, the poor working stiff supports an executive who earns more than 300 times more than he does.

Is the American worth 10 times as much as his British confrere? Is he worth 100 times his Japanese competition? Is his business run better than either of theirs?

Don't make us laugh, dear reader. The only reason American executives earn so much is that they've conned the lumpeninvestoriat into believing that if they are paid more they will produce more. In fact, they're rarely the person actually responsible for output or innovation...and there is no evidence that we've ever seen to suggest that they do better at their jobs when they are paid more.