We have all seen the stories of lavish CEO’s enjoying outstanding perks which enable them to purchase a luxury home, fancy cars, and exotic travels.

The most recent example of this is Blackstone’s CEO Stephen Schwarzman. Because he has such a high profile and “he makes too much money and leads an overly lavish lifestyle”, many politicians are demanding that private equity firms should pay a higher tax rate when going public.

I can understand that the government wants to get their tax revenue and they will jump on the opportunity when the media frenzy continues to write about how much money Schwarzman makes and how big of an issue it is when a private equity firm goes public. But what I can’t understand is what is happening to our capitalist country where the market decides how much (or little) successful entrepreneurs can make.

It seems perfectly reasonable that Schwarzman should keep much of his wealth. He has built a great company which has provided great returns for his investors and his company.

However, if he begins to fail in his duties then the market will let him know and adjust the value of his company accordingly.

I believe that he has worked very hard, and when people work hard, they should be able to reward themselves. Some people may say that his $3000 food shopping weekends with his wife are over the top, but I think it is his perfect right to spend his money the way he wants.

Let’s not forget that Schwartzman and his partner Peter Peterson started Blackstone group in 1985 and has been working at it ever since. It’s not like he won the lotto and became an instant millionaire. 22 years he has built up Blackstone, and now that he has just celebrated his 60th birthday and he is in the prime of his life, he should be able to enjoy himself and have all the toys he desires.

There are countless examples of CEO’s taking their company public so they can diversify their portfolios. Many CEO’s have all of their wealth tied up in their company and they want to be able to do other things with their money.

Also, there has been no evidence that Schwartzman has, or intends to fraud investors and give himself a pampered lifestyle.

It’s a sad day in America when people get jealous at other peoples success and wealth so they try to create laws to restrict how much money they make or increase their taxes on them. It tells other entrepreneurs: Yes, America is a place where you have the right to life, liberty, and the pursuit of happiness, but if you become too successful or make too much money you will pay for it…

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This entry was posted on Monday, July 2nd, 2007 at 9:43 am and is filed under Business Thinking, Business. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.