The Best Is Cheapest

Are successful, high-paid executives too highly paid? No, says Wall Streeter Gerald M. Loeb, a partner in E. F. Hutton & Co.

"No price," wrote Loeb in the current issue of the monthly Investor, "was too high to have paid Walter P. Chrysler to go to work for the obscure and failing Maxwell-Chalmers Corp. and build it up into one of the big three motormakers. No low figure, paid the managements of the smaller independents that at the same time fell by the wayside, could possibly have been a bargain."

The best management is generally the cheapest in the end, wrote Loeb: "The total of top management salaries is at worst a very small percentage of net income; but the mistakes of corporate officers hired purely on a low-price basis can be a very high percentage of net income, or even eliminate any net income at all."

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