Path: utzoo!mnetor!uunet!lll-winken!lll-tis!ames!ll-xn!mit-eddie!bloom-beacon!athena.mit.edu!peter
From: peter@athena.mit.edu (Peter J Desnoyers)
Newsgroups: comp.misc
Subject: Re: lotus chairman makes 26 million
Message-ID: <5079@bloom-beacon.MIT.EDU>
Date: 3 May 88 15:43:31 GMT
References: <9160@cisunx.UUCP> <1801@uhccux.UUCP> <807@netxcom.UUCP>
Sender: daemon@bloom-beacon.MIT.EDU
Reply-To: peter@athena.mit.edu (Peter J Desnoyers)
Organization: Massachusetts Institute of Technology
Lines: 25
Summary: Failure of market to clear

I am more interested in the morality of paying the chairman of 
Lotus the astounding sum of 26 million dollars. That's on the order of
salary (not overhead or bennies) for 500 software engineers. Does
Lotus even employ 500 engineers? They've got a building or two down by
Lechmere, and a new one by the river - I don't think they have room
for 500 engineers plus the support and sales staff. (I realize they
must have more locations, but still, Lotus isn't that big by most
measures of company size except profit.)

If Lotus fired their chairman tomorrow, they would still be in
business in a year. If they fired their engineers, they would be out
of business very soon. This seems to be one of the many cases where
corporate salaries are not explainable by assuming a free market in
equilibrium. Of course, Lotus collects monopoly rents on its products,
due to time of introduction, copyright, and other factors, which allows
them to pay their chairman a vast amount too much, instead of just a
lot more than he deserves.

However, just because this guy is making 26M doesn't mean we should
steal from Lotus. Instead, we should be trying to find out why
executives in Lotus and many other firms are allowed to steal from
consumers and employees, and find a way to prevent it.

				Peter Desnoyers
				peter@athena.mit.edu