The big news of late is that a few marquis CEOS of the country's major banks and corporations have forgone all or part of their bonuses and pay packages. Robert Rubin of Citigroup and Kenneth Lewis of Bank of America have admirably declined to take bonus compensation this past year. The CEO of the construction equipment giant, Caterpillar and others have also followed suit.
Few people, however, believe that the American corporate structure has reformed itself. The reality is that many CEOs are still paid in the tens of millions even as these very same companies have begged for and received taxpayer-sponsored government bailouts.
The mostly symbolic atonement and self-deprivation of a few "star" CEOs is about as comforting as an alcoholic promising not to drink as much he used to. Why does outsized pay continue even as it becomes clear that something is seriously askew?
What is the logic behind lavish pay?
Why won't these rewards go away even as they appear to be useless and even counterproductive? What psychological purpose do they serve?
It is a generally accepted principle that whenever we over-pay it is a good bet that something is emotionally amiss. One possibility is that we over-pay as a way to put someone (unreasonably) above us.
Freud famously theorized that we elevate people for a host of complex but mostly neurotic reasons. This activity seems to exist independent of any reality-based purpose. The very act of elevating a single person or a group of people above us is suspicious, Freud wrote. What are we up to?
To over-pay may actually be a way to avoid the deep anxiety and helplessness that we feel, but desperately want to not feel. We can't make it rain and we can't force the sun to shine on our crops, but how much we want it to. We can't force someone to place money in our bank accounts, but how we wish we could. Fear, anxiety and helplessness are to an extent, the human condition.
Nevertheless, rather than fully come to grips with these deeply unmooring emotions and convert them into helpful action, we place others above us. We may irrationally select leaders and confer magical powers on them. As silly as this may seem it does makes sense to our unconscious. Way back when our first leaders, our parents, did make it rain. They did put money in our bank. My son when he was 4 told me that I put the moon away at the end of the night and bring out the sun for him in the morning. He ascribed to me great powers.
Part of that stays with us. If I can't put money in my bank account, then maybe my leader can. This leader is allowed to have more than me. He is even encouraged to have more than me. He can have more women than me, more children than me, and more pleasure than me. Even if we have lots of money, the temptation is to put someone else in charge of it and to confer extraordinary privileges and power to him. (Think Bernard Madoff and the minions who "trusted" him without verifying.)
What may be most important to consider is that feeding the neurotic need for daddy and mommy, for adults, can become extremely expensive. To bestow magical abilities and unreasonably great privilege on people is unproductive, possibly hostile and almost certainly, a resistance to emotional maturity and economic growth.
