Overpaid.

That Jamie Dimon got an $8M raise bringing his 2013 salary to $20M in the aftermath of JP Morgan’s shelling out billions to settle misdeeds is beside the point.  And that Dimon is charismatic or considered a star in the banking world is equally so.  Dimon is overpaid. Anyone who works, especially at a taxing job with considerable responsibility knows how hard that can be.  We understand that embedded in the idea of a career ladder is the expectation that the higher up we get, the more we will earn.  After all, the place relies on our leadership and the burden of performance is greater.  But $20M for a single year’s work — that’s about $55,000 a day assuming one works seven days a week, which we don’t.  Give us a break.

Dimon’s overly generous salary is hardly unique.  It actually pales in comparison with some of his fellow CEOs.  Before getting to that, I should note that because of the different ways companies report and analysts calculate (some include options, others don’t) it’s hard to get a consistent “apples to apples” handle on  compensation.  I am using and relying on listings compiled by Forbes Magazine and Bloomberg.  While some companies question their calculations (especially the treatment of stocks and options) both tabulations are well worth a look.  Check out the links.

Forbes, which closely follows the super-rich and super-compensated, listed McKesson’s John Hammergren as 2011’s top earner with a total take home of about $131M.  That’s right, $359K a day.  To be fair, without disputing the number, his company questions attributing all those earnings to a single year.  I won't get into that.  The important thing is that Forbes applies their methodology consistently.  Using it, they report that fifty-three other top executives were paid more than Dimon.  Interestingly, despite the conventional perception that Wall Streeters are raking in the most, drug and biotech CEOs actually take home 2.5 times as much as bankers.

To say that Mr. Dimon and his compatriots are overpaid is, in my view, a gross understatement.  Ask yourself, how much harder are they working than the multitude of women and men in their companies who come in daily, often putting in extra hours with no extra compensation?  Okay, Dimon may work harder than many and carry a heavier corporate burden, but $55,000 a day — more than most Americans earn in a year? Bloomberg may use a somewhat different methodology, but their calculation compares a CEO’s compensation with that of his/her company’s average wages.  Their listing is for 2012 when Hammergren’s take home seems to have fallen in to $40M ($110K at day), 733 times the McKesson’s average compensation of $54K.  This multiple calculation is revealing, often shocking.  Ron Johnson (whom JC Penny subsequently fired for poor performance) was earning highest take home of all company CEOs — 1,795 times more than Penny’s average employee.  Astounding.

And then there is the issue of pay raises, which have become so scarce or puny that we have generally seen wage stagnation.  In 2011, according to Forbes, “…the chief executives of the 500 biggest companies…got a collective pay raise of 16%...to $5.2 billion. This compares with a 3% pay raise for the average American worker.”  So not only are these executives earning many times more than employees, they are also getting much higher percentage pay raises.  You don’t have to be a genius mathematician to figure out that over the years this differential takes on a huge multiplier effect further exacerbating and widening income inequality.  These are important numbers because, while there is certainly a gap between the 1% and the poor, the overarching and crucial gap is between people at the top and the millions of working people below, often in the same companies.  Income inequality is stretching and often eliminating the middle class.  That touches virtually of us and in multiple ways.

Some people argue, and perhaps rightly so, that multibillion dollar fines imposed on Dimon’s bank notwithstanding, the government has not done enough to prosecute Wall Streets misdeeds.  But also true, and in some ways equally disturbing, is that bank directors have done little or nothing to hold upper management, especially CEOs, accountable.  If Washington is filled with lobbyists and office holders waiting to become lobbyists, and it is, management’s cronies generally populate and control corporate boards.  It is an incestuous relationship where the same directors sit on multiple boards and that includes CEOs.  It’s a buddy system. You sit on my board and I’ll be on yours. You watch my back and I’ll watch yours.  So, in what amounted to a gentle “slap on the wrist” for an arguably gross performance shortfall Dimon’s board reduced his 2012 pay to $12M (about $33K a day).  Wow, that really hurts!

Those 1-percenters, politicians and pundits who decry and classify talk of income inequality, as “class warfare” should be ashamed.  That anyone, for example, may question why (according to Bloomberg) CBS’s Les Moonves is making 1,111 times the salary of his company’s average employee, is not class warfare.  It’s looking at this glaring disparity and coming to the logical, and I’d argue objective, conclusion that there is something very wrong with this picture.  To put it bluntly, the compensation of many CEOs is an obscene manifestation of unfettered greed.  Don’t get me wrong.  CEOs should absolutely be making more than the average employee and even more than the senior executives on their team, but these numbers are simply and blatantly way out of any reasonable proportion.  It is hard to justify them and keep a straight face.

Of course, corporate directors and so-called compensation experts do justify them, which only shows how out of control and routine this money grab has become.  It seems that they, and those who have shrugged this inequity off as “just the way it is” have lost any and sense of values.  Shouldn’t there be some semblance of even-handedness in assessing an individual’s contribution and worth for a year’s work?  Again, I’m not suggesting that there shouldn’t be some premium, even a considerable but appropriate differential.  On Bloomberg’s charting of 250 CEOs pay ratios, William Sullivan of Agilent Technologies has the lowest, only 173x — $10M (27.4K a day) vs. employees averaging $58.6K.  Does that meet the smell test?

Calling our growing outrage about income inequality “class warfare” is a smokescreen.  If there is any war here, let’s be clear that it’s those at the top getting those huge payouts and their enablers who are well armed.  In a corporate setting, they hold all the cards.  They buy influence whether its the current PAC spending of the billionaire Koch brothers or the self-funding a Michael Bloomberg uses to thwart enacted term limits to gain an extra term as mayor of New York (not to mention the office itself).  They do what ordinary people — and that means most all of us — can’t.   Not only are they unwilling to let go, they fight tooth and nail to hold on, often with a good degree of arrogance.  Employees of their companies fear them and so do we.  Perhaps, like buying a lottery ticket, we don’t cry out because we hope, if they can do it, so can I.  But we know, or should know, for 99% of us that’s mostly an illusion.  It’s an American Dream that seems to be dimming with every passing year.

Singling out Jamie Dimon from a cohort that has collectively acted in much the same way — demanded and happily accepted more than their due — may seem unfair.  Don't' feel bad, I think he can handle the kitchen’s heat.  Dimon may be smart.  He may be well regarded on The Street, but he isn’t our hero and he certainly shouldn’t be our society’s role model.  American CEO’s may be doing good work, but I think they are grossly overpaid while most Americans are being left behind.

Wonderful amid imbalance.

It's been seven plus years since moving to North Carolina from Manhattan where I had spent the better part of my adult life.  In many respects, New York will always remain home.  My favorite museum memberships remain in force, my MetroCard loaded, my coffee is shipped down from the iconic Zabars and of course most of my closest family members live there or close by.  So I drive up several times a year to spend a week or so in those familiar surroundings.  And familiar is the right word because unlike the millions of tourists and other visitors, my perspective on a place where I need no directions and where landmarks and spaces are themselves like "family", is quite different.  For me, it will always be a "wonderful town".

That said, my trips to Manhattan differ in one sense from when I lived there.  While all is familiar, I often find myself as much an observer as a participant.  At the very least, my observations are more acute because they are no longer everyday and perhaps somewhat more objective.  Also, despite all the familiarity and a relatively short time away, the City in the Bloomberg years has undergone considerable change.  Some New Yorkers (probably more who live in Manhattan than in other boroughs) think they've witnessed a great era of progress.  Others are not so sure.  Looking at the results of the recent Democratic mayoral primary it seems that a majority of voters may fall into the second camp.  New polls show Bill DeBlasio, the winning and clearly anti-Bloomberg Democratic nominee, is up 50 points over his Republican opponent.  So at the very least, there seems to be widespread Bloomberg fatigue.

New York has always embraced diversity.  I was struck again in roaming around late last month by the multitude of faces and languages that prevail up on the streets and down under in the subway.  The city, unlike most other places, seems never to sleep.  Traffic continues day and night.  I always have to get reaccustomed to the night and wee hour noises: sirens, cars, garbage trucks, all making their way down the street below.  These unending sounds are especially palpable to one who lives and has become accustomed to a quiet place like Chapel Hill.  Both the diversity and the 24/7 activity are hallmarks of the city's vibrancy, its ethos.  Bloomberg hasn't changed that.

New York saw a rise in construction long before Michael Bloomberg even thought about running for office.   When I moved into my building on West End Avenue forty years ago, it had a direct view of the Hudson River.  We (and our neighboring buildings) were at what was the developed western edge of Manhattan below 72nd Street.  That was until Donald Trump convinced an earlier city administration to allow him to build an extended row of high rises situated over the railroad yards between the river and ourselves.  In the 1980s his Riverside South took our view and changed the character of the neighborhood.  Other developments followed in town, but nowhere near what's afoot today.  If left with any overall impression during this last trip it was that Manhattan has become one large construction site.  To a lesser but noticeable degree the same can be said for other boroughs, especially Brooklyn.  Walk through once familiar streets in Williamsburg and you won't recognize them.

What characterizes, and is all the more striking about Manhattan's seemingly frantic construction is that, whether commercial or residential, the city is building for the rich.  Bigger and gaudier seems to be the order of the day.  Perhaps nothing epitomizes that more than what, at 85 stories, will be the highest residential building now under construction on Park Avenue at 56th Street.  Penthouse apartments will go for $95M.  The fact that this is a project of the notorious Harry Macklowe, who once tore down a Single Room Occupancy building catering to the poor in the middle of the night to circumvent new zoning, only adds to the symbolism.  With every passing year it is getting harder, if not impossible, for people of moderate — even substantial moderate — means to live there.

As I have written before, the growing disparity between those who have far more than they could ever use and those who have far less than they need is perhaps our most urgent national problem.  Nowhere is that more manifest than in Bloomberg's New York.  It is at once a place of striking wonder and imbalance.  At the foot of those gilt edge buildings are a growing number of homeless and jobless.  On one corner sat a young couple that could have been any of our children or grandchildren.  They were begging for money or food.  Poverty and desperation exist throughout the land, but often the extent of it is less apparent because the many of the less fortunate live in communities of equally disadvantaged where they are hidden in "plain sight".  In New York, and surely other large cities, the two worlds stand side by side in sharp relief.  The imbalance is impossible to ignore.

In allowing Trump to build his development, the City got a big concession.  He was required to finance an extension of Riverside Park from its former endpoint at 72nd Street down to 59th where it ultimately would connect with a series of walkways, bike paths and pocket parks along the Hudson leading to the Battery.  It is a beautiful place and, while the high rises may be unaffordable and inaccessible to "ordinary folk", these public places are open to all.  That's also true of the stunning High Line further south in the Chelsea neighborhood.  Indeed Bloomberg can (and does) boast building numerous parks around the city in and out of Manhattan.  But people can't (even though some of the desperate do) live in parks.  Affordable housing has clearly not been part of his agenda, and to be fair, nor has it been for the developers or anyone else's agenda.

New York is also the place where a concentration of corporate titans and financial "engineers" are drawing unconscionable take home pay while those who work "below" them in the same enterprises are losing economic ground.  President Obama regularly points to this disparity and the importance of the middle class in our society.  The wealthy always played a big role in New York — called it their home (or more accurately one of their homes) — but the city, including Manhattan, always boasted a vibrant middle class.  It would not be an exaggeration to say that those with comfortable but modest means were the heart of the city, gave heart to the city.  Think of classic New Yorkers and you don't picture bankers, limos and luxury buildings, but rather the cab driver, public school teacher, corner store operator with that unmistakable accent.  Is that gone?  Of course not, but those "ordinary" New Yorkers are all in danger, being forced out of their beloved center.

When in New York I get around town mostly on foot but often by Subway.  Yes, it can be a bit dirty (though less so), crowded and in the summer especially hot waiting for a train.  But it is a great and relatively inexpensive system.  There is kind of a democracy down in the subways, a better semblance of equality.  Everyone is taking the same ride for relatively the same fare and is moving about in the same accommodations.  If you want to really see the City's diversity of both residents and its many tourists, take the subway.  And it was in the subway that I suddenly had my aha moment.  Right there before my eyes was a powerful symbol of equality, perhaps even a ray of light.  Everyone it seemed, regardless of who they were, how they looked, where they lived or what kind of income they might have had, was either looking down at or was plugged into a smart phone.

Many of these, like mine, were iPhones, and few were outdated.  In a sense, the smart phone has become the democratic possession, a kind of equalizer.  The ray of light is certainly not the phone itself, but a reminder that technology has taken hold and that, as with the phone, the Internet is largely open to all.  Phones connect us and through them or other devices we all are given immediate access to a once unimaginable amount of information.  Just as the Internet poses a great threat to totalitarian regimes around the world, it potentially poses a threat to such obvious inequality here, such a blatant imbalance.  At least the potential of what could, might or should be is in all those New York hands down under and on the streets above.

Potential is the operative word here because of course a smart phone isn't an equalizer in the larger and more meaningful sense.  A new mayor, likely Bill DeBlasio, will be taking office come January.  His roots are planted deep in unabashed liberal populism and he's talking about changing the dynamic that has driven the place since, and even before, Mike Bloomberg took over.  Even raising the issue of inequality will be a refreshing change, but what's in motion is not easily stopped or even modified.  Barack Obama has learned that lesson, and so will a new mayor.  The rhetoric is bound to be way ahead of the action, the hope greater than the immediately doable.  Locally and nationally powerful vested interests stand ready to defend "their" turf.  New York is likely to look much the same my next trip up and in many trips to come.  And the problems discussed here, ones I care about deeply — the fundamental imbalance — doesn't negate that the place remains a very wonderful town.  Whatever comes, that is likely to remain.