Sports Personalities Are Paid Millions, So Why Can’t We Accept Fat Corporate Paychecks?
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That is the argument presented by eminent Harvard professor and the former chief IMF economist Kenneth Rogoff.
A self-confessed basketball fan, Rogoff argues that the public acceptance of fat sportsmen paychecks is in stark contrast to the hostility towards fat corporate payouts and bonuses.
Rogoff commented:
That is the argument presented by eminent Harvard professor and the former chief IMF economist Kenneth Rogoff.
A self-confessed basketball fan, Rogoff argues that the public acceptance of fat sportsmen paychecks is in stark contrast to the hostility towards fat corporate payouts and bonuses.
Rogoff commented:
[quote] What amazes me is the public’s blasé acceptance of the salaries of sports stars, compared to its low regard for superstars in business and finance. Half of all NBA players’ annual salaries exceed $2 million, more than five times the threshold for the top 1% of household incomes in the United States. Because long-time superstars like Kobe Bryant earn upwards of $25 million a year, the average annual NBA salary is more than $5 million. Indeed, Lin’s salary, at $800,000, is the NBA’s “minimum wage” for a second-season player. Presumably, Lin will soon be earning much more, and fans will applaud. [/quote]Related Infographic: How Much Does a Fortune 50 CEO Earn Compared To An Average Worker?
In comparison, he points out that the median compensation for a Fortune 500 CEO is around $10 million – an amount which some find hard to accept:
[quote] If a star basketball player reacts a split-second faster than his competitors, no one has a problem with his earning more for every game than five factory workers do in a year. But if, say, a financial trader or a corporate executive is paid a fortune for being a shade faster than competitors, the public suspects that he or she is undeserving or, worse, a thief. [/quote]Related Infographic: Surprise, Surprise: It’s Good To Be A Financial CEO In The Current Economy
While Rogoff’s position does not necessarily advocate high corporate pay structures, many have been quick to criticize his argument.
In light of the recent financial crisis, the public is not called upon to bail out ailing sporting clubs and teams, unlike the hefty bailout of financial institutions at the peak of the crisis.
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What is more, non-performing players are dropped by their respective managers, and cheating (match-fixing and doping, which is almost akin to insider trading and financial fraud) is not tolerated in the spirit of sportsmanship.
What are your thoughts? Do you agree with Rogoff?
