Steve – I have to respectfully disagree with you on this one. I take a back seat to no one when it comes to contempt for Hollywood. But Hollywood salaries make so much more sense to me than this Grasso thing. That Adam Sandler makes so much money is almost a pure market function. He is a meat prop. If millions of people wanted to look at a lamp or a dog the owner of said lamp or dog could charge huge sums of money to Hollywood studies to put these objects on display on the big screen. Sandler’s talent or lack thereof is meaningless (though I have liked a couple Sandler movies), the market supports what he makes. Sure it’s unfair that Sandler makes so much money, but it’s not unfair that investors have the opportunity to place their bets on him.
What market mechanism justifies Grasso’s bonus? It strikes me this was simply a case of buddies and cronies rewarding somebody with little to no justification. If Grasso were making $300K a year I could see getting a huge bonus. But he was already making $500K a week.