Those Poor Rich People
These are tough times for the outrageously wealthy. Instead of the aspirational Lifestyles of the Rich and Famous exaltation of yesteryear, the popular notion regarding the richest citizens is gearing up to be more like a reality show about spoiled, mean people.
First, Berkshire Hathaway's (NYS: BRK.A) (NYS: BRK.B) Warren Buffett made a high-profile pronouncement in The New York Times: Our society needs to stop "coddling" the wealthy by shielding them from tax burdens that the middle class has been forced to bear at much greater relative financial sacrifice. (Granted, later in his piece Buffett said the megarich he knows are "by and large ... very decent people" willing to pay more taxes.)
Regardless, he's pointing to our society's tendency to let rich people off the hook. Our society also glorifies them. Although rich people may feel that it's unfair for people now to turn around and criticize them, they themselves often feed the fire with problematic behavior of their own.
Dog eat dog
In simplest terms, mean people tend to make more money. That's the finding of a study presented at the annual meeting for the Academy of Management, as the Wall Street Journal reported. Mean men apparently earn about 18% more in salary than their kinder counterparts. Mean women have a harder time than their cruel male counterparts, but still take home about 5% more pay than more agreeable females.
It gets worse. The Association for Psychological Science recently reported that the rich tend to have less empathy than the rest of us. They don't really have to rely on others, so they never really learn to care about others. Instead, they become financial hoarders and often aren't as philanthropic as they could be. Ouch.
Of course not all rich people are devoid of empathy or conscience. Take Starbucks' (NAS: SBUX) CEO Howard Schultz, who grew up in the projects in Brooklyn. His company provides health care benefits to workers because Schultz knows how badly it hurt his family when his father injured himself, lost his job, and had no benefits.
And of course, Warren Buffett's a different kind of billionaire. In 2006, he started giving away the fortune he generated through Berkshire Hathaway. Most of his gifts are slated for the Bill & Melinda Gates Foundation, which focuses on global health and improving education.
Still, our culture has tended to glorify the too-often decadent, non-empathetic rich over those who exhibit more noble behavior. Why would anybody in their right mind defend nasty, money-grubbing, selfish behavior? We've got to stop.
Those of us who defend strong corporate governance keep a close eye on CEO pay, which is too often outrageously disconnected from any notion of true performance. Warren Buffett may have talked about the "coddled" rich avoiding tax sacrifice, but many wealthy CEOs don't seem to feel particularly driven to much financial sacrifice in their roles in the marketplace either.
Last year, The Institute for Policy Studies pointed out that "lay-off leaders" -- companies that whacked the most workers after the financial crisis -- had CEOs who took home 42% more pay than peers in 2009. Johnson & Johnson (NYS: JNJ) , Hewlett-Packard (NYS: HPQ) , and American Express (NYS: AXP) were among the companies called to task.
Pardon me for saying so, but it seems to take a certain lack of empathy to rake in millions when thousands of workers lost their livelihoods on your watch. There's little notion of shared sacrifice in the midst of hardship, and these days, hardships are getting worse and worse for more Americans.
Those poor rich people
Wealthy people are increasingly suffering an image problem, but it's partially their fault for not acting a little more decently in times of crisis. Not only could corporate boards cut CEO pay, but I'm pretty sure CEOs can also request to slash their own pay levels.
It's also the fault of shareholders for too long defending high CEO pay as a given (again, somehow glorifying the super-rich as not having the same standards as the rest of us), not a reward that is earned for truly good operational performance.
In the discussion about what is rich and what is poor, hopefully our culture can start realizing that the "richest" folks are those who contribute the most to a better world overall and think about somebody other than themselves during the most difficult times. Those "poor" rich people indeed.
CheckFool.comevery Wednesday and Friday for Alyce Lomax's columns on environmental, social, and governance issues.
At the time this article was published Alyce Lomaxowns shares of Starbucks. The Motley Fool owns shares of Starbucks, Johnson & Johnson, and Berkshire Hathaway.Motley Fool newsletter serviceshave recommended buying shares of Berkshire Hathaway, Starbucks, and Johnson & Johnson, as well as creating a diagonal call position in Johnson & Johnson. Try any of our Foolish newsletter servicesfree for 30 days. We Fools may not all hold the same opinions, but we all believe thatconsidering a diverse range of insightsmakes us better investors. The Motley Fool has adisclosure policy.
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