Evening star. [volume] (Washington, D.C.) 1854-1972, 1930-06-06
EXECUTIVES DIFFER
ION million: SALARY
Question Raised in Steel
Merger Fight Brings Out
Various Opinions.
BY JOHN F. SINCLAIR.


Special Dispatch to The Star.
NEW YORK, June els any execu-
tive worth salary of a million dollars
year to any corporation?
Charges by the Eaton minority fac
ton in the Youngstown Bethlehem
merger fight that several Bethlehem ex-
ecutives are receiving salaries of a mil
lion a year or more brings this question
forcibly to public attention.
When 1 asked Ralph GWynn of the
Penney-Gwynn Corporation, an import
ant American executive, for his opinion
of whether any executive was entitled
to such yearly salary, he said:
THE million dollar salary-a holdover
from the days of individual promotion
seems to be out of date. Officers of
great aggregations of capital in indus
try today are trustees rather. They are
IN the nature of public servants, for the
public Is interested vitality in big in
dustry, both as investors and patrons.
Hence, in my opinion, such salary In
these days, under such a conception, is
unthlnkable. No man in our inStitu-
ton gets ,one-fourth, or one-fifth, or
even one-tenth as much"
Adolph Zukor. president of the Para
mount-Publix Corporation. known to
nave pdlu SoIle OF CIle largest SALARIES
ever contracted for in American bust
ness. takes different view of it.
Men whose creative ability is worth
more than million dollars a year are
few. But there are some in the United
States. One cannot fix the amount of
reward arbitrarily. A salary-big or lit
tle-is a hardship on the stockholders
OF company only when it is not earned.
Creative ability needs to be rewarded
generously. Then every schoolboy has
something to work for-something to
shoot at Different companies handle
the problem in different ways, some by
giving small salary plus a bonus and
Others by a straight salary. No we'll
managed corporation gives big salary
without just returns from the recipient
To say that million-dollar salary can't
be earned in the United States is fool
ish"
But not all big executives are believers
In big salaries" Some of them have
always been opposed to such salaries,
contending that the overhead involved
in a huge salary, like million a year,
puts too much of a responsibility on
that executive to make good. It's neither
scientific nor wise.
The late Nicholas F. Brady, who was
the largest stockholder of the New York
Edison Co. and one of the best liked
public utility executives in the United
States before his untimely death few
weeks ago at 81, was asked once for his
opinion on this very question His reply
Showed a definite conviction on the sub
Ject.
mo employe of a well-run corporation
can possibly be worth in salary over
100000 year to any corporation" he
said
He did not elaborate on this COM
ment, nor did he express his views on
the payment of additional compensa-
ton as bonuses for those officers whose
efforts increased profits.
The simple statement above stands as
the opinion of one of the most efficient
business leaders of modern America.
Edward A. Filene, Boston financier,
sees still another angle to the million
dollar" salary question. Asked if any
American executive could earn that
sum in year, he replied:
Yes, but not many. I would, for in
stance, pay Owen Young million and
feel sure would get more than mil
lion profit as my share of his work. I
would pay Henry Ford million year
to run Ford Motors. There are others"
Upon what basis, Mr.. Filene, do you
make such a statement?"
'BaSically. I favor paying big eXecu-
tives with liberal predetermined shares
of earned profit and doing away with
all but small salaries for these heads
of big businesses on the good manage
ment of which many thousands of
workers actually depend for their daily
bread. Thus I would make certain that
these heads would get extraordinarily
big incomes from the business only if
they made an extraordinary success of
that business. And by that I mean
keeping the plant and workers profit
ably employed all the time"
Morris White of New York, largest
ladies handbag manufacturer, reputed
to draw several millions year from his
business, when asked the question, said:
"A fat, infleXfble, unscientific salary
today is unjust, both for an executive
and for the stockholders. In my opinion,
small salary and bonus based on the
results is the right system. Then the
stockholders benefits if results show a
large profit, and so does the executive
who brings it about. Nothing has so
driven industry ahead in America as the
constant example before young men
entering business, that If they make
good, they will be rewarded literally.
This principle, I believe, is bssically
sound in capitaliStic system. Thus,
believe a man can draw a million year
from business and still be very great
asset to that business"
There are probably a dozen men in
America in the million dollar class
that is, drawing a million or more an
nually for their executive work in cor
porations. 1t has always been moot
ed question as to just how much these
men are worth. Some are paid lib
eral salary. with no bonus; others a
fair salary and a fair bonus, and still
others a small salary and substantial
bonus. This last form seems to be, at
the present time, more popular than
either of the others.
Many readers. I know. would like
to ask myriad of questions dealing
with this subject. So can we say:
THE race is not to the swift, nor
the battle to the strong; neither yet
bread to the wise; nor yet riches to
men of understanding; nor yet favor to
men of skill-but time and chance
happeneth to them all"
(ccpyright. 1880. by North American News
paper Alliance.l