Outsourcing 100 Top Management Jobs to India Saves More Than Eliminating 10,000 Workers

BreakingViews has an interesting comment in a WSJ article this weekend on Outsourcing CEOs. "Infosys, the Indian outsourcing titan ($29 billion market value), pays its chairman and chief executive $100,000 each and its highest paid top manager $250,000. By comparison, two of Infosys' American competitors, Accenture and EDS, paid their top managers $6.1 million and $8.7 million, respectively, in 2005. Shareholders don't get extra value for money when paying top dollar for U.S. managers. "

In the U.S., the average Fortune 500 CEO is paid more than 400 times as much as the average employee and the myriad senior vice presidents receive 100 times an average worker's wages. Harvard professor Lucian Bebchuk calculates that senior managers in U.S. companies receive up to 10% of after-tax profits in any single year. On this arithmetic, companies could save as much by outsourcing 100 top management jobs to India as by eliminating 10,000 workers. 

Will America's corporate executives look at this form of outsourcing?

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