Daddy(ies) Warbucks

Fortunately, for the last couple of weeks anyhow, gas prices have been on a downhill slide lately. When they were at their peak a short time ago, however, one of the favorite stories in the papers and on the airwaves was the tremendous profit margins of the oil companies, and exorbitant salaries and bonuses being earned by oil company CEO’s. A much less publicized, but likely far more tragic parallel to those stories are the obscenely generous salaries currently garnered by Defense Industry CEO’s.

Here is a brief sampling: United Technologies ($200 million), General Dynamics ($65 million), Lockheed Martin ($50 million), and Halliburton ($49 million). Other firms in which CEO compensation over the last four years totaled $25 million to $45 million were Textron, Engineered Support Systems, Computer Sciences, Alliant Techsystems, Armor Holding, Boeing, Health Net, ITT Industries, Northrop Grumman, Oshkosh Truck, URS, and Raytheon.

Meanwhile, the average soldier putting his life on the line in the Global War on Terrorism in places like Iraq, Afghanistan, and other garden spots around the globe grosses around $25,000 a year.

Please don’t misunderstand. I believe in capitalism and support those pursuing the American dream of financial success. However, I just don’t cotton to folks making obscenely high incomes on the backs of both the soldiers using the equipment being produced, and the taxpayers footing the bill. Clearly, the DOD is not looking for, nor getting any bargains. Wouldn’t a mere million or two dollars a year be adequate compensation for the executives honchoing these companies?

I’d sure feel a lot better about the whole situation if that additional cash was put back into R&D on that equipment, or its replacement. I know from first hand experience that a good bit of the equipment that GI’s count on is neither foolproof nor 100% reliable. We have all read about soldiers’ body armor that didn’t perform up to spec, yet David Brooks, the former CEO of body-armor maker DHB, made $192 million in stock sales in 2004.

Just how big of a house, or how fancy of a car, does a CEO need to feel gratified?