Business schools and Wall Street banks preach a strict, anti-social doctrine of corporate management that comes down to this: CEO’s must be idiots.
By that I mean the original Greek word “idiotes,” which applied to people who care only about themselves and the prosperity of their immediate family, rejecting any responsibility to the larger society, civic affairs and the common good. That selfish ethos is what prevails in today’s corporate suites, where it’s claimed that the only responsibility of executives is to maximize profits for the “family” — i.e., themselves and major shareholders. Idiotes are free to stiff workers, sidestep environmental rules, shaft consumers, etc.
But now comes an apostate to this doctrinal absolutism, asserting that corporate chiefs ought to jack-up the minimum wage to a level approaching minimal fairness. Mark Bertolini, corporate chief of Aetna, is this iconoclast, and he’s not talking about $9 or $10 an hour, nor is he waiting on Congress — he took direct action, lifting Aetna’s lowest wage to $16, plus improved health benefits.
Beginning in April, some 6,000 Aetna employees — mostly working in customer-service and billing jobs — will find a boost of up to one-third in their paychecks. But wait, there’s more! Aetna is also adjusting its company health plan so about 7,000 lower-income workers can get the same health coverage they now have, but pay some $4,000 a year less for it. Can you believe it? A health insurance break from an insurance company!
Like me, you’re probably looking for the loophole in this deal. But, lo and behold, it seems to be on the up and up. Bertolini cast it as a common-sense business move — noting that paying fairer wages and benefits lifts morale, attracts more top-notch employees and helps reduce the $120 million a year in costs that Aetna now shells out because of high employee turnover.
It’s true that all of these benefits will flow to the corporation, but there’s also a deeper element of egalitarian idealism in Bertolini’s moves. “It’s about the whole social compact,” says this rare CEO. He also later said at a J.P. Morgan conference that it’s “really about inspiring our employees and paying it forward.” Bertolini has also asked all Aetna executives to read Thomas Piketty’s landmark book, “Capital in the Twenty-First Century,” on the escalating price our society is paying for today’s ever-widening economic inequality.
The chieftain even did the unthinkable by publicly revealing that these increases are not actually financially painful for corporations — total cost to Aetna will be about $26 million a year — nothing for a giant with annual revenues of $62 billion. The only pain Bertolini might feel is loneliness when he enters the CEO Club and sees other insurance chieftains turn their backs, shunning his leadership on the moral matter of shared prosperity. CEOs of Humana, Anthem and other insurers say, “NO” to raises, sniffing that they pay “competitive wages” — which is just a dishonest way of saying “low wages.” “I don’t think we’re going to go where Aetna has gone to,” said Humana CEO Bruce Broussard.
The most amazing thing about Bertolini’s decision to invest in workers and instill even a smidgen of democratic ethics in a corporate structure — is that it’s considered amazing. After all, basic fairness is a core value that we’re taught from the time we’re toddlers. As Aetna’s chief puts it to the CEO class, “Why can’t private industry step forward … to do this?”
But whether those idiotes like it or not, Aetna just lifted our national standard for competitive wages. Moreover, it has thrown open the doors of the executive suites to an honest public conversation about the morality of those inside jacking up their pay while holding down everyone else.