Jack Welch, in a column co-authored with his wife Suzy for The Times of South Africa, unsurprisingly defended executive compensation being set by the free market. In case you don’t remember, Jack Welch is the former CEO of General Electric Co. (NYSE: GE) who was paid handsomely for his work, including a package for his retirement of (as quoted in yesterday’s post):

An annual retainer of $86,000 and perks that included sports tickets, use of company aircraft and an $11 million Manhattan apartment, bodyguards and other things that the U.S. Securities and Exchange Commission later valued at about $2.5 million annually. 

In the column, Welch argues:

We think the debate over executive compensation is exactly as it appears — a philosophical divide. There are those who believe that many CEOs just make too much money compared with average workers and their relative value to the organisation, and that someone — be it the shareholders themselves or government regulators — must close that gap. Outsized CEO compensation, this group generally believes, is bad for society and morally wrong. Then, there are people who generally don’t say what they believe, because it’s so politically incorrect. But allow us to step in, because we share their view. Yes, most CEOs make a ton of money, and sometimes they make too much. But in the market economy, salaries are set by supply and demand. The companies that field the best teams win and, because of global competition, the best teams tend to be expensive.