[In June 2007 the investment company TIAA-CREF asked investors to comment on the company’s “executive compensation policy.”  This is what Dwight Murphey submitted:]



The executive compensation policy seems reasonable, if one accepts the value system that reigns in the business world today.  If I were on the compensation committee, I might even find it a necessary policy to attract the professional expertise TIAA-CREF needs.  But there should be a recognition that the prevailing value system is badly skewed.  "Get all you can" is commonly thought to be a simple application of the "free market" ethos, but in the history of classical liberal thought (the body of thinking that has most concerned itself with the theory of a free market) there has been sharp disagreement about this, with such major figures as Adam Smith and Richard Cobden believing strongly that market decisions need to be informed by broader considerations of human values.  If the Smith-Cobden position is taken seriously, we see that monetary incentives, though important, should exist alongside professional pride and a desire to serve.  It should be an embarrassment to a professional person to say, in effect, that "a million dollars' annual compensation isn't enough to motivate me fully in the absence of a bonus package."  The question is whether, in today's United States, investment professionals with such pride are to be found. If they are not, the existing compensation policy is inevitable.  If they are, such people should be sought out and given special consideration, since they will have a quality the others lack.