Evening star., 1934-03-01
INDUSTRY LIKELY
TO CURB BONUSES
Publication of Huge Sal
aries Paid for Executives
StirS Public.
BY CHARLES F. SPEARE.
Special Dispatch to The Star.


NEW YORK, March There Is no
form OF curiosity in business life SO
keen as that which centers on the
size Of the other fellows pay check.
Therefore, the publication by the Fed
eral Trade Commission Of the salaries
o. American captains OF industry"
elicits wide attention and provokes
much discussion.
The significant feature Of the CLASH
flcation Of earning power of some
hundreds Of the best known men In
business life Of the country Is that
they have nearly all been employed
both on q salary and bonus basis. It
develops the question whether this is
socially just and In the interest Of the
other employees and the stockholders
OF the corporations which hire them.
Breaking down, so to speak. the IS
or more newspaper columns Of names
into two classif1cations-salar
and salary only-the striking fact Is
uncovered that of q total of 295 in
dividuals mentioned no fewer than
280 received double compensation. In
other words, nearly 95 per cent were
guaranteed fixed compensation and
in addition, received a percentage Of
the profits Of the business on the
assumption that these profits were an
expression of their ability as managers.
In many cases the bonus payment con-
Siderably exceeded the salary figure.
Prominent Cases Cited.
One of the most conspicuous in
stances of this was the much discussed
bonus of the president of the Ameri-
can Tobacco Co., who received over
$3,000.000 as a bonus in l929-1932,
inclusive, compared with q total SAL
ary in that period Of less than $780,
600. Another case was that OF the
president Of the Bethlehem Steel Co.,
whose annual salary in 1928-1930 was
$4,000, but whose bonus then aver
aged about sl,l00,000 per annum.
The president Of the Anaconda Cop
per Co. in 1928 received a salary of
Sl50,000 and bonus Of SITS, ,265. In
1929 and in 1880 the bonus dropped
tc $2.325 and the salary figure jumped
to 100000. The chief executive Of
the Corn Products Refining Co. re-
ceived 100000 direct and &202, 900
contingent, and In the same year the
vice president Of the later embarrassed
Fox Film Co. received q salary Of
about $4,000 and bonus Of $780,
900. His salary last year was $780,
COO One Of the executives of his
concern had a $500000 bonus in 1880
compared with salary Of $4,000.
The International Harvester Co. In
1929 gave its president salary Of
$50,000 and a bonus Of about $685.
900. Montgomery Ward in 1880 paid
its president about 100000 and al
lowed him bonus of around $685.
900. The bonus of the president Of
the Proctor & Gamble Co. in 1928 was
five times larger than his $4,000 SAL
ary and six times greater than this
direct compensation in 1929.
Bonuses paid to officials of the 8.
S. Kresge Co. in the prosperous years
of $4,000. The policy Of the F. w.
Woolworth Co. was to give bonuses
rather than salaries. These have run
up to S752, 900 for the chief execu-
tive.
Regarded as DebatabIe.
DAoAAASoo AAANAA "&Ao oPPOoC Vic bO4Ado
idea say 1t has the effect Of making
an executive self-centered and dis
posed to adopt policies that adversely
affect the general body Of his en-
ployes and also his stockholders. This
is a debatable point.
1t is certain that the general pub
lie today is not In a mood to recog-
nize the need for giving extra COM
pensation to an executive with q sal
ary ranging from $50,000 to s150,000.
It feels that this Is either directly or
indirectly taking something away
from some one else. So there is not
much doubt that either by regulation
or intimation from Federal sources,
the bonus feature OF industrial com.
pensation will be abandoned by a
majority Of those corporations that
have been making it a part of their
business policy.
copyright. 19340