c'mon, why would you purposely try to rile the natives by asking a loaded question to which you're perfectly aware of the simple answer?

It's called supply and demand. Not very many people have the skills and knowledge required to run a billion dollar media company. As such, the McClatchy board feels like it needs to offer a suitable compensation package to attract and retain an individual with the right abilities.

Now, contrast media conglamerate CEO to CSUS professor. What difference immediately jumps out at you? That's right! There are 10s of thousands of people qualified to be a college professor. The CSUS trustees could agree to cut the faculty salaries in half and they would still get enough qualified candidates to fully staff the school. But it's part of a massive government beuracracy, so the trustees have little interest in actually running the campus with the taxpayers' best interests at heart.

The key difference, of course, is that "we" aren't paying the newspaper exec. Unless you're a shareholder of McClatchy, you aren't funding their payroll. As a private entity, they can set compensation however they wish. To attract a CEO that can manage a company that size, the McClatchy board of directors (and the shareholders) must believe that they need to pay this kind of salary. In a free market, the government doesn't get to decide how much someone makes.

Sac State's president and professors are paid by the tax payers. The government (the taxpayers) sets the salary based on what it thinks is a fair price to attract and retain quality employees.

The work is different, as well. The CEO of a large corporation has an entirely different set of experiences than a professor at a small university. The hours are different, the level of responsibility is different. When you factor in semester breaks, state holidays, and the small number of classes taught, how many hours per year does a professor actually work compared to a newspaper CEO? McClatchy's CEO is also responsible for far more people with greater consequences for failure than a single professor is.

If either McClatchy or CSUS doesn't pay enough, the employees can choose to walk away. There are other options, other places to work.

When I mention this concept to my friends who work for the state, they look at me like I just grew purple fur. They say they can't leave because they've got so much invested in the pension system and other benefits. Their compensation is so tied to future benefits that it's essentially deferred. Public employee unions have devised a compensation structure for their constituents that essentially ties them into the job else they lose out on their deferred compensation. Whether this is sheer incompetence on the part of the union negotiators or a deliberate move to indenture their rank and file to the union, I don't know. Either way, they didn't do their constituents any favors.

Thanks for your comments. I wrote the article to make a point - are we valuing contribution properly?

BS12, I dispute your point that if CSUS cut the salary of a professor in half they would still get enough qualified people to fully staff the school. I think you would end up with candidates who didn't need a full-time job to support a family. This is the reason that we see less and less of main breadwinners as elementary school teachers. And I think we lose alot because of that.

And I truly think that being a University President is no picnic - there are lots and lots of issues to deal with.

Here are some shocking statistics to ponder though on my point behind the piece:

The average CEO of a major US corporation made $11.9 million in 1999, 476 times what the average blue-collar American worker made. That's up from 42 times more in 1980, and 85 times more in 1990.

US CEO pay dwarfs foreign CEO pay. German CEOs make 13 times more than the average German manufacturing employee. In Japan, the CEO-to-worker pay ratio is just 11-to-1.

And lest we get confused about Mr. Pruitt - I didn't even count in the value of any options he received. And the stock price is trading pretty much at the bottom of its 12 month trading range. But, if you read the SEC documents, his bonus is not based (as far as I can tell) on something as mundane as stock price. Now, if I were a shareholder, I would wonder what I was paying for.

Keep the comments coming...

My compliments to you for airing this issue. Many would argue that many a college professor has much more impact on the world we live in than the current crop of underperforming and overpaid CEO'S (not intended to apply to the one you mentioned here). I just saw a show on PBS where they mentioned that Rockefeller and Carnegie, the famous Robber Barons, were making $10 million a year, when the average worker was making $500.00 per year. We seem to be returning to the same pattern.

You need to be careful comparing US businesses to foreign ones. The business climate is considerably different in the US than it is in other countries. Regulatory issues, competitive environments, and employee relations in the US are so different that it's difficult to draw comparisons with running businesses in other countries.

I knew the CEO of a local company owned by a foreign interest. He was from the "home office" and moved to the US to take the reins. He talked several times of how different it was to operate a company here than in Europe.

Ben And Jerry's founding CEO Ben Cohen famously declared that no employee at the company would make more than 5 times the wage of the lowest-paid employee. To attract and retain qualified people, they had to up that to 7x and eventually scrap the concept altogether. They simply couldn't find qualified execs that were willing to earn $140k per year at B&J when they could earn an order of magnitude more than that amount elsewhere. (Interestingly, though, Cohen still insists that higher pay doesn't mean more qualified people.)

Is there excess being thrown at US CEOs? Certainly. Robert Nardelli's compensation package for helming Home Depot was irresponsible of the board. If I were a shareholder in Home Depot, I would be seeking the resignation of every member of the board of directors. But that's for the shareholders to decide, not some external entity. If they want to pay their CEO huge amounts and not base that on performance, that's their prerogative.

CEO pay is out of whack not becuase of the supposed dearth of 'talent' but because it is a buddy system. People support the inflated CEO pay because that's where they hope to be in the future or the directors & voting shareholder who approve that sort of pay are all in the same peer group and are all to happy to grease eachothers palms. If being a CEO was simply a matter of talent then there would be a direct relationship between their compensation and a company's performance. There isn't. And corporations can be just as incompetant and bureaucratic as any government.