Where Big Money Is Made

Executive View/Marshall Loeb

Where Big Money Is Made

Country music, that vivid, livid mirror of America's loves and hates, reflects a growing target: the rich. Listen to Johnny Paycheck, folk philosopher with a gritty guitar:

This ole boy, hell, I've had enough

Of the way the big man rakes it in.

The big men in some corporations are sure raking it in. April's shower of proxy statements reveals that a few fortunate chiefs are drawing record payments of salary, bonus and benefits: $1.7 million to Revlon's Michel C. Bergerac, for example, and $2.5 million to Warner Communications' Steven J. Ross. Alan Ladd Jr., the dollar scion of a departed Hollywood heman, collected $1.9 million last year as president of the 20th Century-Fox movie division, mostly in the form of a bonus for having had the shrewd sense (or good luck) to make Star Wars. Ford Motor had three men in seven figures: President Philip Caldwell, Executive Vice President J. Edward Lundy and, of course, Chairman Henry the Deuce himself.

Reports of the outsize rewards are enough to make many an inflation-straitened American sing along with angry Paycheck. But before everybody gets upset, let alone envious, it might be wise to put the large numbers in perspective. Though nobody has to pass a collection cup for the fellows who reach the top of corporate America's greasy pole, those who make big money as hired managers are a small minority. Down in the trenches, which is anywhere below the senior vice president level, the rewards are moderate and uncertain. A lot of bank vice presidents and middle managers in heavy manufacturing are lucky to crack $35,000; they commonly get a title in lieu of money.

Employees in a company might have reason to cheer when their chairman gets large rewards. Says Dudley V.I. Darling, a top executive recruiter with Ward Howell Associates: "The pay scales of people from lower middle managers up through officers are usually pegged to the salary that the chief collects." Middle managers are paid best in industries that compensate their top managers the most: cosmetics, autos, electronics, data processing, entertainment Such industries tend to be highly profitable and fast growing, and they give relatively more to employees and less in dividends to shareholders than do companies in older, slower-moving but more secure industries, such as commercial banking, utilities, heavy metals and railroads.

Everybody knows that $1 million isn't what it used to be, and it is also common wisdom that even the highest-paid corporate executives earn less than such folk idols as disc jockeys, movie and rock stars and even country music heroes; Johnny Paycheck will be good for $1 million or more this year.

Most of America's real money--the big money--goes to its small businessmen, entrepreneurs and professionals.

The quickest, surest buck is earned by doctors. Their household incomes average $74,000, vs. $83,000 for presidents of companies with 25 employees or more. But practicing physicians strike it rich when younger (their average age is 47, vs. 54 for presidents), and there are more of them in the U.S. (275,000, vs. 137,000 company presidents). Rewards are even greater for risk-taking entrepreneurs. The corner druggist who opens a chain of stores is a Norman Rockwell hero, and he often earns far more money--and gets far less flak--than a drug company chief. A lucky Texas wildcatter is looked upon as a sturdy independent, and he can buy and sell an oil company middle manager. A large crowd of Holiday Inn, Coca-Cola and Roto-Rooter franchisees, real estate brokers, art dealers and liquor distributors are good for $500,000 or more, year after year. Given the multiplying value of their land, probably more farmers and ranchers than corporate executives have a net worth above a million.

So despite those bold headlines of big pay for some higher-up hired hands, an old fact remains true: America still reserves its richest rewards not for those few who climb in corporate hierarchies, but for the many who dare, who risk, and who go into business for themselves.

This file is automatically generated by a robot program, so viewer discretion is required.