I think Milton Friedman said it best when he asked, “What is greed? Of course, none of us are greedy, it’s only the other fellow that’s greedy.” Even growing up fairly poor in rural West Virginia, I never really viewed anyone as greedy unless some other kid hoarded his toys or crayons to keep other kids from playing with them. That was not even really greed, that was a kid trying to make sure some other kid didn’t take or break something he cherished. It’s difficult to classify an innocent child as being greedy. But when someone else knowingly withholds and hoards money or other valuables with no purpose other than to collect and hoard more of it, it is greed. In reality there’s not really that much greed in the United States general society. Lots of people accuse Wall Street bankers, oil tycoons, or others of greed, but for the most part they are driven by success and the money follows when they take advantage of opportunity. There’s a question of morality involved but it doesn’t mean it’s all greed. Most everyone I know who has been successful and fortunate enough to amass a net worth of many millions of dollars continue to work and grow, develop businesses, invest in real estate, and other things to continue to be successful. Those investments create jobs and it’s a never ending cycle. A few years ago I was a consultant that helped with Due Diligence projects on acquisitions ranging from $10 Million to over $150 Million. I saw everything except greed.
One of the common examples that consistently comes up is that Walmart’s CEO makes more than 1100 times more than their median employee wage. That’s $22 Million compared to $19,177. At the surface when presented that way, it would appear to be driven by greed. Let’s look at it another way. If the Walmart CEO made $1, how would you make a difference with the rest? Walmart has 2.3 Million employees, so if you break that down to annual pay, you could distribute the $22 Million across the employees and they would all get about $9.57 per year barely enough for lunch and a coffee for one day. Let’s say for the sake of this article the average Walmart employee works 20 hours per week. I could have looked up the actual numbers, but I wanted to try to be a bit conservative. Across 1000 hours in a year, that would be a $0.01 per hour raise for every employee. Even if you remove all managers and team leaders and said only basic employees received the raise it would probably wouldn’t equate to $0.02/hour. So what do you do with the $22 Million? Donate it to charity? I’m sure Walmart already donates the maximum amount they are allowed to deduct so it probably would not make sense. Then if you did, you have no money to pay a leader for the world’s largest employer. Is the Walmart CEO worth $22 Million a year? Personally and comparatively, I do not believe anyone is really worth that much money. But the free trade market determines they are worth that much to the business. Looking at the scale, the Walmart CEO’s earnings is only 0.0044% of the company’s revenues of more than $500 Billion.
It takes an experienced leader to lead a company like a Walmart or any other company for that matter. Success and the market determine what they are worth to the company, not greed.