CHAPTER 4

Historical Perspective on Executive Pay

In his 1936 State of the Union address, President Franklin D. Roosevelt railed against “entrenched greed” at American corporations. At the time, the average compensation for the top executives of a big company was about $95,000.

—Wall Street Journal

America evolved from an agrarian economy to an industrial powerhouse through the complex interactions of innovators, entrepreneurs, rule of law, a capitalist system, growing capital markets, and a rising class of professional managers. The chief executive officers (CEOs) mainly held ownership interests as founders, partners, and major stockholders. With industrial consolidation in the late nineteenth and early twentieth centuries, professional managers ...

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