What do the music-biz, the auto industry, the banks, and big-box stores like Cicruit-City have in common? A corporate culture that pays enormous sums to CEOs. The Big Dog in the U.S. gets paid more, relative to the lowest payed worker, than in any other country.
For example, let’s look at the CEO of a large record company who was faced with internet, Napster, downloads, file-sharing, and piracy 10-15 years ago. Does that CEO want to deal with the enormous changes that would become necessary – or does he keep steady, collect two or three years worth of his million-dollar salary and retire? Same goes for the CEO of a car company – does s/he change course and develop hybrid tech or is it simply easier to collect a few years of their mega-salary and then disappear from the arena.
Over the years I have expressed this opinion to a number of people in the music-biz and everyone I talked to agreed with me. Since I don’t know anybody in the auto-industry I am just guessing that the problem is similar.
It seems to me that corporate culture needs to change and that stockholders should demand that their board of directors take a more long-term view.
Then again, what do I know!? I don’t claim to understand economics, but it seems that even the experts can’t agree on anything these days…