Wednesday, November 01, 2006

Little Miss Sunshine and CEOs

People who view success by how much money they accumulate, may sometimes even use other yardsticks of achievement and a viewing of the current popular indie movie Little Miss Sunshine, could even bring some down to earth.

In the Financial Times on Tuesday, columnist Stefan Stern focused on a modern totem of success- the CEO's mouth watering heist (this should of course be distinguished from the returns made by successful entrepreneurs. There is often a blurring of the distinction but there is a huge difference between a person who may have risked all and an individual who has climbed the greasy pole in a company that was established by someone else, maybe decades ago).

Stern says that something has happened as far as attitudes to immense wealth are concerned. In 1987 Oliver Stone caricatured the “greed is good” instincts of notorious Wall Street figures in the shape of the corporate raider, Gordon Gekko. Perhaps Fox should consider re-releasing the film – except that now it might be seen not so much as satire but as an instructional video.

The triumphant march of capitalism, which began stutteringly with the fall of communism in 1989, is now reaching top speed in spite of corporate scandals and the volatility of equity and commodity markets. Its victory was saluted enthusiastically by Lester Thurow, a professor at the Sloan school of management at MIT, in his 1999 book, Building Wealth.

Stern says that here he accurately described the underlying ethos that has made possible the monster pay packages of today. “Wealth ultimately is the way the score is kept in capitalism,” he wrote. “Wealth has always been important in the personal pecking order but it has become increasingly the only dimension by which personal worth is measured. It is the only game to play if you want to prove your mettle. It is the big leagues. If you do not play there, by definition you are second rate.”

Are vast CEO salaries simply a question of supply and demand? Boards and shareholders want the best available person to lead the organisation and, perhaps, hardly anyone will be up to the job. Those who are can command a high price.

In a fascinating recent podcast, Wayne Guay, a professor at the Wharton School of the University of Pennsylvania, explains why CEO pay has reached such extraordinary levels. He is unimpressed by the data that reveal the gap between CEO pay and that of ordinary employees – like comparing “a carpenter to a computer programmer”, he says. (Remind me, what did that nice young carpenter from Nazareth say about the rich and the Kingdom of Heaven?)

Supercharged salaries seem to be the product of a self-perpetuating system. Pay consultants advise their clients on the latest schemes to reward performance, headhunters push up the asking price for “talent” while non-executive directors sit on each other’s pay review boards. It all looks a bit cosy. But this is merely the logical outcome of a world where, as Prof Thurow explains, anyone with any sense is trying to earn as much as possible as quickly as possible.

Income inequality is beginning to worry people on all points of the political spectrum. Pay for ordinary workers in the developed world seems to be standing still while their leaders continue to make hay. But can one executive really claim so much credit, and be so disproportionately rewarded, for the results achieved by a huge multinational corporation? That is doubtful at best.
Stern says that we should ask the super-rich CEO the same searing question that was put to Senator Joe McCarthy by special counsel Joseph Welch at the Army-McCarthy hearings of 1954: “Have you no sense of decency, sir, at long last? Have you left no sense of decency?”

Little Miss Sunshine

The Hoover family is a dysfunctional one that lives in Albuquerque, New Mexico. The grandfather Edwin Hoover (Alan Arkin) has been ejected from a nursing home because of his taste for heroin and his anti-social attitude including a lot of swearing. His son Richard (Greg Kinnear) is a deluded motivational speaker who divides the world into two groups - winners and losers. He doesn't realise which group he belongs in, but his wife, Sheryl (Toni Collette) does. She's supporting him while he tries to get a book published about the nine steps to success and it's driving her demented.

Their 15-year-old son Dwayne (Paul Dano) is pissed off with life and is a fan of the nineteenth century German philospher Friedrich Nietzsche; he hasn't spoken in nine months. When Sheryl brings her brother Frank (Steve Carell) home from the hospital to recuperate after an attempted suicide, the brooding brother, has to share a room with Dwayne who writes on his notepad: "Welcome to hell."

Seven-year old Olive (Abigail Breslin), wants to be a winner to please her Dad and that means winning a beauty contest. When Olive discovers that due to a disqualified finalist who was caught with diet pills, she has got a place in the Little Miss Sunshine beauty pageant in Redondo Beach, California, she rocks the house with her joy. This spurs the Hoover family to pile into their rundown VW bus and make the 700-mile trek from Albuquerque, weathering a series of increasingly complicated hindrances along the way.

Plain looking Olive, amidst the sculpted daughters of pushy parents, creates a sensation with a routine that she picked up from her grandfather and the family's experience may not be the ideal path to the American dream, but there is the moral that failure to be number one at your goal doesn't make you a failure. That finding the joy in what you do and who you are is what makes you a winner.