Super-rich CEOs are mad as hell, and not gonna take this anymoreFebruary 14, 2014: 11:02 AM ET
As the insensitive comments and sky-high salaries add up, it's easy to start thinking that CEOs and other execs have completely lost touch with the lives of everyday Americans. Sadly, that's likely the case.
FORTUNE -- Politicians have long been criticized for being out of touch with reality (see George H.W. Bush's gallon of milk), but these days, business executives are the ones who seem to be truly disconnected from everyday Americans.
The latest flub came Wednesday from Bud Konheim, CEO and co-founder of luxury fashion brand Nicole Miller, who on CNBC's Squawk Box said that the so-called 99% should stop complaining and realize how lucky they are. "We've got a country that the poverty level is wealth in 99% of the rest of the world," he said. "So we're talking about woe is me, woe is us, woe is this." He added that "the guy that's making, oh my God, he's making $35,000 a year, why don't we try that out in India or some countries we can't even name. China, anyplace, the guy is wealthy."
Don't waste time trying to make sense of his suggestion. Just consider it the latest instance in an ongoing trend of execs failing to relate to anyone outside the 1%.
Tom Perkins, venture capitalist and co-founder of Kleiner Perkins Caufield & Byers, falls into this growing category after comparing the "progressive war on the 1%" to Nazi anti-Semitism. So does Sam Zell, billionaire chairman of Equity Group Investments, who defended Perkins by saying that "the 1% work harder." Throw Lululemon (LULU) founder Chip Wilson into the mix. He thought that blaming Lululemon's defective yoga pants on the female figure -- "some women's bodies just actually don't work" -- was totally acceptable. And AOL's (AOL) chief Tim Armstrong qualifies for numerous reasons, the most recent being pegging his company's decision to alter its 401(k) contribution program on ill newborns.
CEOs now make 273 times the average worker salary, according to the Economic Policy Institute, so it's easy to think that all those dollar bills have finally gone to these guys' heads. And that may be the case.
In a well-known rigged Monopoly game study, social psychologist Paul Piff found that the player who had publicly -- and by chance -- been given more money and advantage at the beginning of the game became ruder, less sensitive to the plight of his poorer counterparts, and more demonstrative of his success as the game progressed and he amassed a Monopoly fortune. Another study by Piff found that people who made less than $25,000 a year gave 44% more money to charity than people who made $150,000 to $200,000 per year.
The Konheim incident "shrieks of insensitivity and grandiosity," says Jeffrey Sonnenfeld, professor at the Yale School of Management. "It makes you wonder about other decisions he's making. His flippant style makes it seem like he's never going to be able to hear bad news," Sonnenfeld says.
Whether that sense of privilege ever sets in depends a lot on whom CEOs keep in their company. "You better have a few people -- a spouse, best friend, or sibling -- who won't let you forget who you really are and where you came from," says Harry Kraemer, a clinical professor at Northwestern's Kellogg School of Management and the former CEO of Baxter International, Inc. Executives get a lot of positive press and plenty of pats on the back. "If they're not careful they'll start to believe it," he says.
That's what happened in Piff's study. When asked to explain why they thought they won the rigged Monopoly game, the winners talked about how they'd wisely purchased property and earned their victory, losing sight of the flip of the coin that had assigned them extra money and privilege at the outset.
"There's a lot of serendipity in a CEO's success," says Sonnenfeld. "You have to have the humility to recognize that."