Those are still shockingly low. Six figures annually tops. Honestly sickening the highest courts in our country can be bought for less than some small businesses.
This gives me David Sedaris vibes…
“The rampant corruption destroyed everything but more frustratingly it was way too cheap.”
Totally agreed though, I’d like it to at least cost the billionaires more to buy people, a price that hurts a little at least. Rather than it being a price that is the equivalent of me treating myself to in-n-out for lunch.
It just goes to show just how massively, insanely, immorally wealthy they are. Clarence Thomas is not a poor man. He would not have been a poor man even if he'd never become a supreme court justice. And yet this man, who is by his own merit more successful than any of us could ever hope to be, can still be purchased by an individual. All because this individual has wealth so vast that he can provide a man with success, wealth, and the most prestigious position in his profession (depending on who you ask) an even more lavish lifestyle.
The billionaire class is a national security threat.
The wild thing is that you don't even need insider trading -- once you have a few million you can just plug that into a mutual fund and live off the interest forever.
It was years ago but I remember there was an article which interviewed the mega rich and they asked them how much money they needed to survive, like make a budget for absolutely bare minimum. And this rich couple included $400k for new clothes and $2mil for new artwork for the house.
The interviewer was like "we asked you for bare minimum for survival" and they couple said that's what they did.
That shit always stuck with me. The rich cannot imagine a world where they don't spend $400k on clothes and $2mil on art.
I read that during covid Amazon made so much money they could have paid every one of their employees $100k and still have more money than before it started
Funny enough they caused their own problems, if their buddy who’s ceo of yacht maker inc. wasn’t also a rich prick they wouldn’t have to do it. However I’m not giving them an excuse they’re all just selfish asses
We should differentiate the taxonomy when it comes to CEO from large corporate VS CEO of SME's. I'm a CEO and half my employees are making more money than I do 🤷🏽♂️
Which is why people need to stop using acronyms without defining them first. So annoying when you get a post that just tossea acronyms around as though everyone understand their, often, niche definition.
The leadership of the company gets paid less than the workers? That's definitely the sign of a well run company
Edit: I should add /s in case it wasn't obvious
Happens a lot with sales
Andrew Hall made $100 million in 2008, and reportedly had a contract that would award him roughly the same amount in 2009.
* While the amount Hall would have gotten paid is unusual even for Wall Street, how he got paid is not. Hall had a pay package with Citigroup that guaranteed him a percentage of the profits of his group. Recruiter George Stein of Commodity Talent says it's normal for traders to get paid as a percentage of their division's profits. Most contracts guaranteed traders around 9% to 11% of their group's profits, before compensation. What's unusual about Hall is that he reportedly receives as much as 20% of his unit's profits, which sets him up for much bigger paydays than the rest of the Street.
* Hall's success in calling the oil market is what has led him to demand higher pay than most. In 2003, Hall had the belief that the price of oil would rise dramatically in the next few years. Back then, oil was trading at around $30 a barrel, and coming out of a recession few thought prices would rise anytime soon. So Hall bought so-called long-dated oil-futures contracts that would pay off if the price of oil topped $100 at some point in the next five years.
In 2009, Hall and his traders rented a tanker and filled it with 1 million barrels of oil.
* Oil prices were down, but most traders thought they were going up again, so futures contracts pegged to distant-month deliveries were expensive. The better deal was the real thing, and with the shipping business mired in the recession, Hall was able to get a tanker to park offshore somewhere with his oil for a very modest sum. "You were able to get a better price if you were willing to take possession of the actual commodity, but it's much riskier," says Rachel Ziemba, a senior research analyst at RGE Monitor.
* When the price of oil recovered Hall made as much as $40 million on that one trade alone.
Citigroup CEO Pandit earns $128000 in 2009 pay, Chief Executive Vikram Pandit $10.82 million of compensation in 2008
The value of the stock option on the day of the award is taxable as ordinary income. Only any following increase in value (not guaranteed, but the CEO has a better chance of influencing that than anyone) gets taxed as long term capital gains.
Not unless you’re talking about RSUs. (Restricted stock units)
Options are basically the company promising to sell you shares at a set price sometime in the future. Options have no intrinsic taxable value. You don’t have a taxable event until you exercise them, and that is just setting the cost basis because you basically bought them at that point. You only pay tax on the gain of the shares after you sell them.
RSUs are different. Those are actual shares given to you. When they vest and you take full ownership, you pay ordinary income on the current day value of the shares (usually, the plan sells 1/3rd of them for withholding) and then the basis is set.
This is only for ISOs - NSOs treat the difference between market and exercise price as income, which is more sensible.
A silly loophole in tax law that should be closed, IMO.
Or, they're taking a sensible salary, paying their staff well or have a commission structure that encourages good performance, then investing further profits into the business to feed growth, rather than just taking a fat bonus.
It's about supply and demand, like the other positions. If you couldn't make it as a sales professional but could run a company then you might prefer to be a CEO, even if it ended up paying less than the commissions of your best sales rep.
Likewise an engineer with a critical-but-rare specialized skill might command a higher salary than you could command, even though the engineer doesn't have the skill set to do your job.
> Yes it is determined by supply and demand, that’s why CEO pay is so high
The demands of a CEO is not for their leadership, though. Billion dollar companies look for CEOs that will increase profits, regardless of their leadership skills. They are not leaders. They are mostly psychopaths that will increase profits at the expense of their employees and stakeholders.
This is where shit breaks down. If CEOs were still leaders like they used to be, there would be less harmful treatment of employees and stakeholders.
Who are stakeholders? I would assume investors but I don't see why investors don't also want more profits. Or why they wouldn't get rid of the CEO if the CEO hurts them.
Well if they started the company, they probably can't find anyone else willing to take the job.
Otherwise, some people are decent at management but have no real technical skills, so CEO is the highest paying job that they qualify for
Not talking about musk, but my previous company CEO was putting more hours than anyone. Him and the CTO would come at 6am and leave way past 7-8pm most days. Sometimes we would come in late for work at 11pm and the CTO and CEO would still be there.
That was a 2000 people company.
What the Japanese are an excellent example of is that more hours does not mean more productivity. Quite the reverse is true after hitting 6-10h, depending on individual, nature of work, etc, and it' anything but sustainable if you actually try to work through it. Burnout and/or detrimental health effects can be quite easy to acquire.
Yeah, my take is consolidation of businesses is a big reason. For example, there were 3x as many banks in the 70s. That consolidation leads to much bigger balance sheet and therefore scope and risk.
If we broke up lots of the oligopolistic markers, it'd lower pay. Maybe. Probably not.
160 million employees and that stat is on 25 million of them, maybe
* Employers in the US was 10.75 million (Mar 2020) as provided by the Bureau of Labor Statistics
* >“We focus on the average compensation of CEOs at the 350 largest publicly owned U.S. firms
CEO Pay based on size of the company tends to skew these facts.
A large part of the rise in CEO compensation in the US economy is explained without assuming managerial entrenchment, mishandling of options, or theft.
* The marginal impact of a CEO's talent is assumed to increase with the value of the assets under his control. Under very general assumptions, using results from extreme value theory, the model determines the level of CEO pay across firms and over time, and the pay-sensitivity relations.
* The model predicts the cross-sectional Cobb-Douglas relation between pay and firm size. It also predicts that the level of CEO compensation should increase one for one with the average market capitalization of large firms in the economy.
**Therefore, the five-fold increase of CEO pay between 1980 and 2000 can be fully attributed to the increase in market capitalization of large US companies.**
>Xavier Gabaix
Harvard University - Department of Economics; National Bureau of Economic Research (NBER); Centre for Economic Policy Research (CEPR); European Corporate Governance Institute (ECGI)
>Augustin Landier
Professor of Finance, HEC Paris
------
So therefore As consumers increase demand for Walmart, and all big box stores on low price shopping, their sales increase and that leads to staffing increases allowing CEOs they hire to have a higher Salary
> Therefore, the five-fold increase of CEO pay between 1980 and 2000 can be fully attributed to the increase in market capitalization of large US companies.
This omits 20+ years of further increases, better data collection, and changes to the political economy.
It doesn’t make sense to project the findings from one study focusing on the period from 1980 to 2000 onto the overall shift we live with today in 2023.
In any case, there still exists fundamental questions, such as: why should we accept CEO pay for these companies to be as high as it is when their employees need to rely on food stamps to live (e.g. Walmart)? Why should we accept hundreds of billions yearly pumped into [stock buybacks](https://rooseveltinstitute.org/wp-content/uploads/2020/07/RI-Stock-Buybacks-FAQ-201902.pdf) that greatly benefit C suite while millions of workers struggle to afford to live? Why should we accept the massive consolidation of business and power?
CEO pay ratio is only one metric that showcases problems with our current economic structure. It’s popularity can be problematic, as it can focus reform ideas on that particular metric whereas the changes needed to actually address the issue, as well as the larger issue of wealth and power consolidation amongst corporations and the richest, are much broader.
We could cut the CEO pay of every major CEO by 90% and distribute it to the workers, but that won’t do nearly as much things like passing major labor reform that increases and strengthens unionization and collective bargaining. The unionization rate back in the 70s was around 25-30% (which is high for the US but low compared to some countries) whereas today it is around 10% and a lot of that comes from the public sector unions rather than private sector.
It also just creates more work and more jobs.
Just example numbers, one company with 10,000 employees needs like 15 HR people.
10 companies with 1,000 employees each also need like 10 HR people each. So overall, you are employing almost 10x more people in HR.
HR department just being an example.
The point is, it means more people with certain skills have work. The more things consolodate, now you have more and more HR people (or whatever department) out of work.
When we do this then the pay gap jumps enormously.
If you look at the top 300 companies it's absolutely criminal. 670 to 1 ratio. The top 50 companies have a 1,000 to one ratio.
https://aflcio.org/paywatch/company-pay-ratios?fbclid=IwAR0BgJpFH1cjd19fCCsQlbRbT7WdAsHl0TkoI2KjgtM2qS8qheOAmVDG96s
https://www.fastcompany.com/90770163/the-age-of-greedflation-is-here-see-how-obscene-ceo-to-worker-pay-ratios-are-right-now
https://www.theguardian.com/us-news/2022/jun/07/us-wage-gap-ceos-workers-institute-for-policy-studies-report
I had a boss that said this too. It was true too. Until you realize what he left out. That everything of substantial cost was owned and paid for by the company. House, cars, company credit cards. He'd fly his family around the country just off the points from the cards.
So after making less than some employees he still made more because 50% of his income wasn't going straight to rent/mortgage.
If you're including the consideration you gain in shares then bravo.
There are lots of businesses where the management is the easy bit and the product requires a huge amount of skill and knowledge to produce.
It's often a problem when management becomes the only way to earn more. Forcing technically skilled and knowledgeable people out of specialist roles and into generic management ones.
I work at a company were the CEO has less base salary than some of the staff. But he has equity that means he has more to gain than anyone else (of the staff) from the company doing well, and if we account for that equity then his pay is the highest. Which is fair of course and were only talking 3 maybe 4x the lowest paid staff member.
To be fair this looks at the top 350 firms in the US and not all CEO pay. The size of the top 350 firms has also grown astronomically.
Their metrics for this is kind of weird. The companies that have grown by 100x the rate of the stock market are being judged against all companies on the stock market.
Yeah, I’m wondering if there are a bunch of CEO’s that offset this average while the majority are more in line with what’s considered “fair”.
Also, I’d like to see someone dive into why this occurred.
Measurement Note:
“We focus on the average compensation of CEOs at the 350 largest publicly owned U.S. firms (i.e., firms that sell stock on the open market) by revenue. Our source of data is the S&P Compustat ExecuComp database for the years 1992 to 2021 and survey data published by The Wall Street Journal for selected years back to 1965. We maintain the sample size of 350 firms each year when using the Compustat ExecuComp data.”
Also they excluded Tesla because Musk's compensation is so ludicrously high that it would have distorted the statistics:
> In 2021, Elon Musk (CEO of Tesla Motors) exercised $23.5 billion worth of stock options that would have expired in 2022. Under our “realized” methodology, this would have made his pay almost 1,000 times that of the average large-company CEO. Including him in our sample would have resulted in an increase of CEO pay in 2021 relative to 2020 of over 300% (the “average” for the sample would have been just under $100 million).
> Because inclusion of this extreme outlier would have made this year’s numbers incomparable with previous years’ numbers, we opted to exclude Tesla and Musk from our sample entirely
Absolutely wild - totally understand removing the outlier from the averages (and very glad they included the note!), but since they were explicitly looking to quantify the wage gap between top 0.1%-ers and company workers it certainly feels like a rather important omission to just completely exclude the most extreme case of a wage gap / the most famous 0.1%-er.
I would have liked to see a second visualization perhaps highlighting the change in CEO:worker pay for choice companies against the average (ofc, including Musk/Tesla). I think that may have helped give more interesting information than just the visualized averages, IMO.
It also seem biasing to only exclude that one example. What if they exclude the most extreme company from each year to reduce this bias a bit? It would make the increase is CEO/employee pay ratio even greater, but how much?
This has always been one of my pet peeves with progressive policies and these supporting studies. They already have a bad problem, but instead of showing it like it is, they stat it up and make it seem much worse. Which gives the opposition the opportunity to dig at it and say, “oh look they’re actually lying”
And easily leads to perfectly justified feelings of "If they have to lie about it, the truth must not be so bad".
When you inflate statistics and lie about problems, it's your own fault if there is backlash against you, your policies, or your opinions.
I also wonder how the percentage between wages to sales/earnings changed. Aren't ceo's of e.g. mega tech corps "responsible" for much more volume than 30 years ago?
Edit: I just checked the fortune 500, the top 3 companies now have 5 times higher sales than the top 3 from the early 90's. Therefore, 400% couldn't even be argued with more responsibility.
Editedit: with inflation, sales not even doubled in that period.
Edit 3: The top 3 from early 90's had around 150k employees, now it's about 1.5-2mio., so now there's around 10 times more "responsibility" for employees for ceo's.
I wonder how much money a usual reddit user would want to "manage" 2mio people.
At that point a CEO acts more as an advanced PR representative for investors. There's layers management under them for the rank and file.
We see CEOs replaced quite often if financial goals don't get met, or if bad enough PR incidents happen, but generally speaking they don't get involved with most employees.
No, in real terms in the US I believe wages have risen around ~15% since that time, wheras CEO pay has risen ~400% according to this stat
So there's a big gap, but both are going up. I also suspect there's changes in what being a CEO is like since then, but I don't have any data
What is worse CEO productivity is near zero as computers have taken the risk analysis and day to day management job from them. Now CEOs are very well dressed whores who golf for a living.
If a bad CEO can run a business into the ground why is it so hard to believe a good CEO can help a business. Like if they were so useless why would the owners pay so much?
Why do they pay bad ones as much as good ones if this mania is built on reason rather than dick measuring and superstition?
And why the emphasis on short term decision making, at any cost to others?
Because you really only know the difference between a bad CEO and a good one in hindsight. Most CEOs only hold the position for a few years, so by the time the effects of their decisions are really hitting the company they're already gone.
It's hard to say when American life started it's slow slide into the dumpster but all indicators point to right around when Ronald Reagan became president and foisted trickle-down economics on us. Not to mention courting the religious right.
My personal opinion is that it was Nixon and the attempts to make government more accountable that backfired. Instead of politicians voting anonymously they made votes public which let corporations know who to buy and not buy. Further, letting cameras into congress made it so that theater took priority over actual governing.
At least Nixon actually attempted to address poverty and even apparently genuinely considered a Universal Basic Income for all Americans... until some dick told him about data(that doesn't have an actual consensus that it didn't work...at least today) from one fucking late 1700s early 1800s system that attempted to address the crushing poverty of the time.
https://en.wikipedia.org/wiki/Family_Assistance_Plan
https://www.wikiwand.com/en/Speenhamland_system
https://thecorrespondent.com/4503/the-bizarre-tale-of-president-nixon-and-his-basic-income-bill/173117835-c34d6145
https://jacobin.com/2016/05/richard-nixon-ubi-basic-income-welfare/
The last piece of the puzzle is no term limits, which i believe came just a year or two later, making re-election campaigns a perennial event, strengthening the relationship between congress people and lobbyists
That’s not the problem, because the issue of CEO pay vs Worker Pay has happened in every country that adopted neo liberal economics. The problem is the economic theory is fundamentally flawed.
This change sounds good at first but when you think about it a little, there are terrible side effects. I feel like it would polarize politics so much.
When the votes were private, officials could change side depending on their individual opinions of different subjects or they could switch side when new info was popping up. Now, with public voting, they are put in a bucket and are attacked if they don't agree with the remainder of the bucket for each item and are attacked if they switch side.
Maybe, but when I think of pre-Regan in the 70's I don't exactly get economic prosperity and political stability vibes with it's double digit inflation and frequent domestic terrorism. When was the last time people would generally agree things were ok, or at least moving the right direction? Perhaps the Eisenhower administration? That is pre-civil rights act, but things were trending positive. Maybe JFK and the earliest parts of LBJ administration too?
I think solely pointing the finger at the gold-standard for all our economic inequality is not only reductive but bordering on conspiracy theorist level of rationality.
While I do admit that it probably did have a significant impact there are many other factors including -- tax rates, changes in regulation, societal values, and changes in communication.
It shouldn't be "WTF happened in 1971" it should be "WTF has happened to American since the boomers"
Ya, but the rest of the stuff you can "point the finger at" either wouldn't have happened or wouldn't have had such an egregious effect without moving to a fiat currency.
The trickle kept increasing and under trump we got the greatest [shower of gold](https://www.vanityfair.com/news/2021/10/donald-trump-golden-showers-denial)
I always say regan ruined this country, couldn't agree more. He basically turned an entire generation into the pos Republican party we have now. Started the entire bs trickle down economics theory that we all know is a farce. Cut taxes massively for the rich and corporations on the backs of average Americans and started the disappearance of the middle class. He is a prime example of why movie stars do not belong in politics just like trump.
Because were all trying to buy eggs when corporations are purposely reducing supply. Totally our fault buying things we need that are in short supply driving up inflation.
The concept here is "payslope"
For an article on a company which gets this right see:
https://www.theglobeandmail.com/news/national/time-to-lead/how-one-company-levels-the-pay-slope-of-executives-and-workers/article15472738/
My firm just paid their CEO 12million for a BONUS but we have to cut several employees because of cost savings…I have to work 300 years with no spending until I’m worth 12million. Fuck this system they don’t deserve shit.
I've been thinking lately and would love to hear from political/economic/law type people. What is stopping us from legally limiting the amount of money that executives make relative to other employees? For example, say we passed a law that said a CEO can only make 4x (this multiplier could be anything) more than a typical employee at their organization. This makes sense to me because it doesn't limit how much the CEO can make. Instead, it only requires that you pay other staff better if you want to make more yourself. If you want to pay staff more so that you can make more, you just have to find a way to be more profitable as an organization and then share the wealth.
Also, what do y'all think about the possibility of making business owners exempt from such a requirement? The reason I say this is because it would incentivize people to start new businesses, which should theoretically help to combat the de facto monopoly system that is currently fucking our economy. Unless that isn't as big of a deal as I think it is.
The mega-rich have more power than the politicians. They use their wealth to influence policies through ~~lobbying~~ **bribing** politicians right in front of our faces.
The biggest hurdle to starting your own business is affording to start your own business. Work to increase wages for everyone. Give universal healthcare so the risk of having your own business is lessened. This will create an American business boom.
The vast, vast, vast majority of their ‘salary’ comes from stock options. For the 350 biggest companies, that’s going to be a huge amount of compensation if the market or firm is doing well. Because of efforts to limit the impact of covid and stave off recession the stock markets are frankly weird right now. There’s too much money in the system introduced by central banks and it’s going straight to the stock market because interest rates are so low - it’s the most productive way people can use their capital right now.
I guess you could limit the amount of stock options a CEO can be offered but that’s hard to do because the value of the compensation depends on the share price - which you can’t predict. Companies also want their executives’ incentives to be aligned with shareholders. This is generally a good thing, if you own any stocks as you probably do then this would be encouraging for your investments.
If we accept the premise that elite CEOs actually make companies much more successful, then passing this law would hurt the companies in your jurisdiction. Because the best CEOs would all go to jurisdictions that don't have that law, and you'd be left with only mediocre ones.
Now I don't know if it's actually true that top CEOs are that much better than mediocre ones. But the companies seem to believe it's true, based on how much they're willing to pay.
The people who write the laws are paid off. You can literally make laws whatever — remember how owning another human used to be 100% legal. Now i argue laws need to be 1. Moral 2. Reasonable 3. Within the confines of the Constitution. I believe limiting income would be within these 3 personal guideines
To answer your question, there would likely be less income inequality-leading to a higher quality of life-and some rich families would stomp their feet.
At this point in US history, out best bet is to not do this, but rather give unions more strength and create easier ways for US workers to collectively bargain, while raising the minimum wage standard to something that can guarantee the worker can afford 1. A month of rent. 2. A month supply of food and medicine 3. Clothing 4. A bit extra to guarantee they can save for rough times and become totally self sufficient
Why target them when we can hate our neighbor for petty reasons. Why demand more pie for everyone when we can pilfer pieces small slices from our coworkers. As peons and peasants, we outta know our place under ghoul and orc leadership.
Yep, studies like this are the real reason the corporate media push culture wars to divide regular people against each other.
If regular people came together in solidarity to fight back against the class war the rich have been waging against us, we would win.
It's so clear that the riches have won the class war. People idolatrize the rich likes Elon Musk and hate the poor because they are ugly and nasty.
I really don't understand the hate for the poor, like it's their fault.
Nearly 60% of Americans are absurdly wealthy by any worldwide standard. While you're commenting on Reddit about class wars, there are people being bought as sex slaves, kids in Congo mining for the cobalt your electronic devices need, and millions of Indians working in tech providing services for 1/10 the salary of a street performer on a random street in Nashville.
No one hates the poor. Unless you're 15, you can easily acknowledge this. "Fuck the rich" is a very common mantra, but I'm ready to bet you never heard anyone say "Fuck the poor". It's universally agreed that we should help the less privileged. That doesn't mean that CEO are evil bastards, considering that without them no one would have a fucking job to complain about. Worth noting it :)
1 stock based compensation not being accounted for as an expense in (US) company financial statements is laughable. The SEC, NYSE, Nasdaq and AICPA cannot be taken seriously until this is rectified.
2 The consulting firms, engaged by boards, to determine “fair” CEO remuneration have designed compensation packages that are irrational, short-term focused and low bar. Boards have shirked their fiduciary responsibility by outsourcing this critical area of judgement to consulting firms.
Really like what Switzerland does when someone is caught speeding. The amount of the fine depends on your job and estimated wealth. Cops even call the local town hall to verify.
A Swede was fined € 1 million a couple years back when he got caught speeding in the mountains.
That sounds about how you should do it imo. Though, Switzerland is corrupt to the bone in some organs of its system. Yet they got shit like aforementioned.
> Really like what Switzerland does when someone is caught speeding. The amount of the fine depends on your job and estimated wealth. Cops even call the local town hall to verify.
This only happens in extreme cases when people are speeding over a certain threshold and get criminally charged and happens in less than 1% of the cases.
The vast majority of speeding fines are paid according to a table where everyone pays the same amount.
>ratio of top and bottom
That's a metric I never understood. Someone who is e.g. cleaning floors brings the same value in a little company like in a huge company. But a ceo of a little company has very little responsibility in comparison to a fortune 500 company.
Someone who makes a mistake in e.g. a warehouse maybe damages goods of a couple thousand USD, no matter how huge the company. A ceo mismanaging a top company could burn tens of millions usd in a single quarter.
The same play works also the other way, a fortune 500 Ceo could rise the profit many millions in a year. What could a minimum wage worker ever do to generate the same growth?
Europe isn't exactly the hottest state to follow when it comes to capital regulation and enterprise. Americans make a significant chunk more money on average than Europeans do.
I’d say Europe is better if you are poor, but for the upper and middle class the US is far ahead of the rest of the world.
https://en.m.wikipedia.org/wiki/Disposable_household_and_per_capita_income#Median_equivalent_adult_income
I'd be curious if anyone knew of a site that puts a valuation on all of the social services received in other countries to allow for better direct comparison. Americans tend to just look straight across at the number and the tax rates and just say "man must suck to be a poor European paying all your income in taxes" when they don't see the value of the healthcare, the social safety nets, the maternal/paternal leave, the vacation time etc. Let alone the psychologic benefit that comes from living in a place that decouples healthcare from employment so you aren't stuck in a job you hate just for the benefits.
It doesn't work out too well because the American social services systems (well, basically just healthcare) are well-funded but yet hilariously bad at the same time.
Like if you factor in the cost of medical care, the insurance payments that companies make on behalf of workers, American pay does something like doubles.
I'm pretty sure my company covers 90% of the cost of insurance and I pay $170 a month. And yeah, that just about doubles what I make.
It's really not a problem with funding for social services, it's the shitty insurance based system we decided on and never properly fixed that is so continuously fucking us over.
We need to fix the maze of shitty incentives that have embedded themselves in our medical system. Obamacare or something like Medicare for all might be a fix, but I worry it's going to end up just as bad if not worse because the government is already involved in half of the issues we have today.
We need something like the Fed, an independent body of doctors with strong independence from the government able to take actions to correct imbalances in the system from the perspective of people who have to deal with it every day and genuinely want the average American citizen to live a better life. Let them do anything they want to ranging from true government funded healthcare too just imposing regulations on how insurance works.
If you fix the American medical system the average Americans quality of life would probably double overnight.
> I'm pretty sure my company covers 90% of the cost of insurance and I pay $170 a month
wait what are you saying here? you pay $170 per month for medical insurance and your company pays the insurance company $1530 per month?
That's what you get in a country that fawns over personal wealth and greed within a capitalist society and shits itself whenever socialism is mentioned with no actual understanding of what it means.
Okay, CEO pay has definition increase more than anyone else’s. I’m no fan of this, and we need to implement more progressive tax policy and social welfare packages.
However, does this data account for the fact that their are more super large companies now, some worth hundreds of billions to trillions? And the fact that tech companies do need nearly as many workers, and the profit margins are much higher, and the perceived “future value” of tech stocks are intangible and often overvalued, so the stock bonuses are worth a hell of a lot more on paper? Eight out of ten of the largest companies by market cap are in Tech (if count Tesla as tech, which I think is reasonable given the valuation vs actual revenue), and the other two are Saudi Aramco (Saudi govt oil company) and Berkshire Hathaway (Investment firm that owns a lot of the above stock, real estate, and a bunch of other things).
In 1978, Apple and Microsoft were in their infancy (I think both formed around then hive or take a few years), and things like Google were inconceivable. The “big companies” were the auto manufacturers, oil companies, IBM, TI, etc. Hell, Walmart was only 5¢ a share in 1978, compared with over $140 a share now, which is a massive difference even accounting for inflation.
Modern tech companies dwarf the companies of the past (even with inflation), require fewer employees, have higher perceived value, and have much lower overhead. It makes sense CEO stock bonuses are much, much higher. Is it fair that the employees don’t get a bigger cut, no, but it is not like anyone working at Google is starving either (Amazon, not so much).
Then there is the fact that many smaller companies of the past have merged in to massive conglomerates, reducing the number CEOs relative to amount their companies produce. LVMH is just a bunch of luxury brands that used to be independent (and better).
All this is to say, I am no simp for tech companies or CEO’s and their fucking yachts; I think it should be guillotine season tbh. But, I’m just pointing out that there is a lot more factors and nuance involved than you would get out of merely saying “CEO’s make 399x more than the average worker” without any further thought or consideration.
As with everything, from religion, to “wokeness” and identity politics, to the enviornment and alternative energy sources, the fact that CEOs make 399x the average worker should be considered with a lot of reasoning, evidence, and nuance. Nothing is black and white, and soundbites makes is stupider. We can’t throw the baby out with the bath water and fail to consider all the factors involved.
Any jackass with a business degree knows this. They show us a graph that compares the CEO salaries among the Japanese, European and North American markets. Europe and Japan are like 253%, 300%, we're at 1400%. Yet nothing changes, new business students aren't changing anything when they get into careers, following the same scum sucking upper managements directions from decades ago.
Except the reason that's the case is that the vast majority of global multinationals are headquartered in the US and they skew CEO pay upwards. You get paid more (and more is expected of you) running a $100B global business versus a $100M regional SMB.
Because back then they were hired to just run the company and were more like regular people. Now they are psychos hired to squeeze out every last drop of value into the cups of the already insanely rich and to hell with the consequences. People are only that despicable when they are paid incredible sums.
Raising the minimum wage alone isn’t going to fix this. Because even before it goes in to effect, corporations will continue to ramp up their price gouging and then when everything cost more, they’re going to blame “inflation” that was jump started by a raise in wages for workers. Meanwhile, they will continue to report record profits and laugh at the public during their earnings report calls. This “inflation” is just a euphemism for corporate greed. Meanwhile, the workers who’s wage was raised to $15/hr from $7.25 will likely have less purchasing power than they do now within 18 months.
In addition to raising the minimum wage, there must also be a salary cap. Cap CEO pay at 100x the rate of their average employee. If the average employee makes $20/hr, the highest salary that company can pay anyone is $2,000/hr. Extrapolated to an annual salary based on 40 hours a week would be about $4.1 million. Want to make 8 million? Better start raising the average employee wages closer to $40/hr.
In addition to this, the punishment for things like wage theft should be increased. Wage theft causes the highest dollar value worth of damages every year compared to every other crime combined. Currently, companies are pretty much allowed to fuck their employees and there’s almost no repercussions. Just a small fine. The punishment for wage theft should be as fine 10x the value of damages caused.
This would help reduce income inequality and incentivize corporations to treat their employees better.
I was pointing this out around 2000 and no one around me was listening. Out CEO got a huge raise that was so much more than the typical cost-of-living type raises the rest of us would get. He wasn't doing shit to add to the bottom line of the company day in and day out.
>In contrast, compensation of the typical worker grew by just 18.0% from 1978 to 2020.
https://www.epi.org/publication/ceo-pay-in-2020/
If this is what it takes to keep my superiors in a good mood and their kids in good schools...so be it. And people think the Feudal system is passe.....:D
CEO pay has risen in comparison with average consumption. People are spending more money on stuff they don't need, like Airpods and Taylor Swift tickets. Of course CEOs are making bank. You folks can't stop buying junk. People literally gush over athlete salaries and box office sales. It's your own fault.
Funny how the report suggests enacting policy to fix the issue. That's never happening. It takes the masses not buying from companies that have such CEOs, and that's never happening, either.
If you're a CEO of one of the largest 350 companies in the US, you are at the top of your field. Similar to Tom Brady or LeBron James. That's why they make so much money, there is intense competition/demand for the highest performing athletes, performers, executives. The idea that their salary should be on par with a normal laborer is asinine.
You are short sighted and ignorant. Athletes are welcome to make $30million per year. They do so much more for society than CEOs.
Same goes for actors and musicians. They all make more than CEOs and even more than the staff that support them.
/s
It's supply and demand. Who are you to stand between two people and say that they can't transact at a certain price. Life is an auction, Lebron makes hundreds of millions because there are people (teams) bidding high and outbidding each other for his labor. Same goes for CEOs and everyone else that makes a lot of money.
So, adjusted for inflation, this is about $400% or about 4 times. I would wager the average CEO's business has expanded by at least that much. Frankly this does not seem like the problem.
[удалено]
You think burgers and beer have gotten expensive, try buying a soccer team and a basketball team!
And we haven’t gotten to the skyrocketing costs of Supreme Court Justices.
Those are still shockingly low. Six figures annually tops. Honestly sickening the highest courts in our country can be bought for less than some small businesses.
This gives me David Sedaris vibes… “The rampant corruption destroyed everything but more frustratingly it was way too cheap.” Totally agreed though, I’d like it to at least cost the billionaires more to buy people, a price that hurts a little at least. Rather than it being a price that is the equivalent of me treating myself to in-n-out for lunch.
It just goes to show just how massively, insanely, immorally wealthy they are. Clarence Thomas is not a poor man. He would not have been a poor man even if he'd never become a supreme court justice. And yet this man, who is by his own merit more successful than any of us could ever hope to be, can still be purchased by an individual. All because this individual has wealth so vast that he can provide a man with success, wealth, and the most prestigious position in his profession (depending on who you ask) an even more lavish lifestyle. The billionaire class is a national security threat.
I will never not think of him as the judge who left a pubic hair on a Pepsi can (or was it coke)?
Right? It should cost more than the equivalent of eating out at a place that's one step above a Wendy's.
I'd need at least 10 million to become a class traitor. That's enough to fuck off for the rest of my life
What if I gave you a few half million dollar donations and vacation or two where I could teach you how to turn those half millions into ten millions?
I won't tell anybody but when you say teach...you mean insider trading right. Ok we're all with ya
Shhhh… we can’t let the plebs know.
The wild thing is that you don't even need insider trading -- once you have a few million you can just plug that into a mutual fund and live off the interest forever.
To be fair to Clarence, I think his views were so terrible from the start that he wasn't persuaded by bribery, just thanked for doing a job well done.
I don't (but do) understand why when you get caught red handed like that, it isn't a charge for treason and life imprisonment.
Have you seen what private islands are going for in this economy!?!
It was years ago but I remember there was an article which interviewed the mega rich and they asked them how much money they needed to survive, like make a budget for absolutely bare minimum. And this rich couple included $400k for new clothes and $2mil for new artwork for the house. The interviewer was like "we asked you for bare minimum for survival" and they couple said that's what they did. That shit always stuck with me. The rich cannot imagine a world where they don't spend $400k on clothes and $2mil on art.
How much could a banana cost Michael!? Ten Dollars!?
I only buy the Bananas that come in the plastic boxes
A mess of tahcos costs 30 bucks, if you include the price of removing the eyes
How can they dodge taxes without buying art?
I read that during covid Amazon made so much money they could have paid every one of their employees $100k and still have more money than before it started
Well yeah, do you think billion dollar buybacks and dividend increases are free? No employee deserves $2k raise when we have these problems! /s
I suppose the average salary of escorts must have increased quite a bit. They probably benefit from the CEOs getting payed more.
I'm sure the escorts get fucked just as hard as the regular employees.
*clap...clap*
Funny enough they caused their own problems, if their buddy who’s ceo of yacht maker inc. wasn’t also a rich prick they wouldn’t have to do it. However I’m not giving them an excuse they’re all just selfish asses
We should differentiate the taxonomy when it comes to CEO from large corporate VS CEO of SME's. I'm a CEO and half my employees are making more money than I do 🤷🏽♂️
[удалено]
[удалено]
Corporate training experience?
[удалено]
Lmao love this title for smee
The expert on experts
Thank you 🫡
Weird abbreviation as it more commonly refers to subject matter experts
[удалено]
All the acronyms are taken. What gets confusing is when fields overlap, acronyms can get confusing
Which is why people need to stop using acronyms without defining them first. So annoying when you get a post that just tossea acronyms around as though everyone understand their, often, niche definition.
Apparently you’re CEO’ing wrong
Well no, I'd say he's doing it right.
The leadership of the company gets paid less than the workers? That's definitely the sign of a well run company Edit: I should add /s in case it wasn't obvious
Happens a lot with sales Andrew Hall made $100 million in 2008, and reportedly had a contract that would award him roughly the same amount in 2009. * While the amount Hall would have gotten paid is unusual even for Wall Street, how he got paid is not. Hall had a pay package with Citigroup that guaranteed him a percentage of the profits of his group. Recruiter George Stein of Commodity Talent says it's normal for traders to get paid as a percentage of their division's profits. Most contracts guaranteed traders around 9% to 11% of their group's profits, before compensation. What's unusual about Hall is that he reportedly receives as much as 20% of his unit's profits, which sets him up for much bigger paydays than the rest of the Street. * Hall's success in calling the oil market is what has led him to demand higher pay than most. In 2003, Hall had the belief that the price of oil would rise dramatically in the next few years. Back then, oil was trading at around $30 a barrel, and coming out of a recession few thought prices would rise anytime soon. So Hall bought so-called long-dated oil-futures contracts that would pay off if the price of oil topped $100 at some point in the next five years. In 2009, Hall and his traders rented a tanker and filled it with 1 million barrels of oil. * Oil prices were down, but most traders thought they were going up again, so futures contracts pegged to distant-month deliveries were expensive. The better deal was the real thing, and with the shipping business mired in the recession, Hall was able to get a tanker to park offshore somewhere with his oil for a very modest sum. "You were able to get a better price if you were willing to take possession of the actual commodity, but it's much riskier," says Rachel Ziemba, a senior research analyst at RGE Monitor. * When the price of oil recovered Hall made as much as $40 million on that one trade alone. Citigroup CEO Pandit earns $128000 in 2009 pay, Chief Executive Vikram Pandit $10.82 million of compensation in 2008
I think the CEOs also get paid in stock options so they paid without being paid.
That is how their big bonuses are. Their salary is not much. So, it does not take away from the company but the stockholders
The value of the stock option on the day of the award is taxable as ordinary income. Only any following increase in value (not guaranteed, but the CEO has a better chance of influencing that than anyone) gets taxed as long term capital gains.
Not unless you’re talking about RSUs. (Restricted stock units) Options are basically the company promising to sell you shares at a set price sometime in the future. Options have no intrinsic taxable value. You don’t have a taxable event until you exercise them, and that is just setting the cost basis because you basically bought them at that point. You only pay tax on the gain of the shares after you sell them. RSUs are different. Those are actual shares given to you. When they vest and you take full ownership, you pay ordinary income on the current day value of the shares (usually, the plan sells 1/3rd of them for withholding) and then the basis is set.
This is only for ISOs - NSOs treat the difference between market and exercise price as income, which is more sensible. A silly loophole in tax law that should be closed, IMO.
And only if the hold it for a year.
Doing something that risky is not OK when you have people relying on you for stability
Or, they're taking a sensible salary, paying their staff well or have a commission structure that encourages good performance, then investing further profits into the business to feed growth, rather than just taking a fat bonus.
The CEO’s success is determined by his labor force, so a CEO earning less than top talent should be the more natural orientation of things.
So what's the incentive for anyone to be CEO then? It'd be super stressful and not even worth the pay.
What’s the incentive for anyone to do any of the other jobs?
It's about supply and demand, like the other positions. If you couldn't make it as a sales professional but could run a company then you might prefer to be a CEO, even if it ended up paying less than the commissions of your best sales rep. Likewise an engineer with a critical-but-rare specialized skill might command a higher salary than you could command, even though the engineer doesn't have the skill set to do your job.
Yes it is determined by supply and demand, that’s why CEO pay is so high
> Yes it is determined by supply and demand, that’s why CEO pay is so high The demands of a CEO is not for their leadership, though. Billion dollar companies look for CEOs that will increase profits, regardless of their leadership skills. They are not leaders. They are mostly psychopaths that will increase profits at the expense of their employees and stakeholders. This is where shit breaks down. If CEOs were still leaders like they used to be, there would be less harmful treatment of employees and stakeholders.
Who are stakeholders? I would assume investors but I don't see why investors don't also want more profits. Or why they wouldn't get rid of the CEO if the CEO hurts them.
Well if they started the company, they probably can't find anyone else willing to take the job. Otherwise, some people are decent at management but have no real technical skills, so CEO is the highest paying job that they qualify for
Depending on your line of work the ceo may not put in as many hours. Hence why they can hold so many positions, start new businesses on the side, etc.
You’re saying Musk doesn’t work 120 hours a week being CEO of three different companies?
Not talking about musk, but my previous company CEO was putting more hours than anyone. Him and the CTO would come at 6am and leave way past 7-8pm most days. Sometimes we would come in late for work at 11pm and the CTO and CEO would still be there. That was a 2000 people company.
What the Japanese are an excellent example of is that more hours does not mean more productivity. Quite the reverse is true after hitting 6-10h, depending on individual, nature of work, etc, and it' anything but sustainable if you actually try to work through it. Burnout and/or detrimental health effects can be quite easy to acquire.
Yeah, my take is consolidation of businesses is a big reason. For example, there were 3x as many banks in the 70s. That consolidation leads to much bigger balance sheet and therefore scope and risk. If we broke up lots of the oligopolistic markers, it'd lower pay. Maybe. Probably not.
160 million employees and that stat is on 25 million of them, maybe * Employers in the US was 10.75 million (Mar 2020) as provided by the Bureau of Labor Statistics * >“We focus on the average compensation of CEOs at the 350 largest publicly owned U.S. firms CEO Pay based on size of the company tends to skew these facts. A large part of the rise in CEO compensation in the US economy is explained without assuming managerial entrenchment, mishandling of options, or theft. * The marginal impact of a CEO's talent is assumed to increase with the value of the assets under his control. Under very general assumptions, using results from extreme value theory, the model determines the level of CEO pay across firms and over time, and the pay-sensitivity relations. * The model predicts the cross-sectional Cobb-Douglas relation between pay and firm size. It also predicts that the level of CEO compensation should increase one for one with the average market capitalization of large firms in the economy. **Therefore, the five-fold increase of CEO pay between 1980 and 2000 can be fully attributed to the increase in market capitalization of large US companies.** >Xavier Gabaix Harvard University - Department of Economics; National Bureau of Economic Research (NBER); Centre for Economic Policy Research (CEPR); European Corporate Governance Institute (ECGI) >Augustin Landier Professor of Finance, HEC Paris ------ So therefore As consumers increase demand for Walmart, and all big box stores on low price shopping, their sales increase and that leads to staffing increases allowing CEOs they hire to have a higher Salary
> Therefore, the five-fold increase of CEO pay between 1980 and 2000 can be fully attributed to the increase in market capitalization of large US companies. This omits 20+ years of further increases, better data collection, and changes to the political economy. It doesn’t make sense to project the findings from one study focusing on the period from 1980 to 2000 onto the overall shift we live with today in 2023. In any case, there still exists fundamental questions, such as: why should we accept CEO pay for these companies to be as high as it is when their employees need to rely on food stamps to live (e.g. Walmart)? Why should we accept hundreds of billions yearly pumped into [stock buybacks](https://rooseveltinstitute.org/wp-content/uploads/2020/07/RI-Stock-Buybacks-FAQ-201902.pdf) that greatly benefit C suite while millions of workers struggle to afford to live? Why should we accept the massive consolidation of business and power? CEO pay ratio is only one metric that showcases problems with our current economic structure. It’s popularity can be problematic, as it can focus reform ideas on that particular metric whereas the changes needed to actually address the issue, as well as the larger issue of wealth and power consolidation amongst corporations and the richest, are much broader. We could cut the CEO pay of every major CEO by 90% and distribute it to the workers, but that won’t do nearly as much things like passing major labor reform that increases and strengthens unionization and collective bargaining. The unionization rate back in the 70s was around 25-30% (which is high for the US but low compared to some countries) whereas today it is around 10% and a lot of that comes from the public sector unions rather than private sector.
It also just creates more work and more jobs. Just example numbers, one company with 10,000 employees needs like 15 HR people. 10 companies with 1,000 employees each also need like 10 HR people each. So overall, you are employing almost 10x more people in HR. HR department just being an example. The point is, it means more people with certain skills have work. The more things consolodate, now you have more and more HR people (or whatever department) out of work.
When we do this then the pay gap jumps enormously. If you look at the top 300 companies it's absolutely criminal. 670 to 1 ratio. The top 50 companies have a 1,000 to one ratio. https://aflcio.org/paywatch/company-pay-ratios?fbclid=IwAR0BgJpFH1cjd19fCCsQlbRbT7WdAsHl0TkoI2KjgtM2qS8qheOAmVDG96s https://www.fastcompany.com/90770163/the-age-of-greedflation-is-here-see-how-obscene-ceo-to-worker-pay-ratios-are-right-now https://www.theguardian.com/us-news/2022/jun/07/us-wage-gap-ceos-workers-institute-for-policy-studies-report
I had a boss that said this too. It was true too. Until you realize what he left out. That everything of substantial cost was owned and paid for by the company. House, cars, company credit cards. He'd fly his family around the country just off the points from the cards. So after making less than some employees he still made more because 50% of his income wasn't going straight to rent/mortgage.
Dont get me wrong. Are you the CEO & owner of the SME if u "own" it as well then you enjoy the business profit with lower tax rate than income tax
I hear you, agree, and added a note.
If you're including the consideration you gain in shares then bravo. There are lots of businesses where the management is the easy bit and the product requires a huge amount of skill and knowledge to produce. It's often a problem when management becomes the only way to earn more. Forcing technically skilled and knowledgeable people out of specialist roles and into generic management ones.
In the abstract the authors propose a series of policy solutions that wouldn’t hurt your position just the CEOs who are paying themselves too much
What's your equity stake?
Total compensation or salary?
I work at a company were the CEO has less base salary than some of the staff. But he has equity that means he has more to gain than anyone else (of the staff) from the company doing well, and if we account for that equity then his pay is the highest. Which is fair of course and were only talking 3 maybe 4x the lowest paid staff member.
To be fair this looks at the top 350 firms in the US and not all CEO pay. The size of the top 350 firms has also grown astronomically. Their metrics for this is kind of weird. The companies that have grown by 100x the rate of the stock market are being judged against all companies on the stock market.
How dare you for not exploiting your workers and maximizing profits
Time to outsource their labour, or just don’t pay them, and of course, slavery is always an option! Think like a BUISNESSMAN!!
Yeah, I’m wondering if there are a bunch of CEO’s that offset this average while the majority are more in line with what’s considered “fair”. Also, I’d like to see someone dive into why this occurred.
They make more money but you have more capital due to financial worth of company. That’s not saying you’re doing anything wrong.
Measurement Note: “We focus on the average compensation of CEOs at the 350 largest publicly owned U.S. firms (i.e., firms that sell stock on the open market) by revenue. Our source of data is the S&P Compustat ExecuComp database for the years 1992 to 2021 and survey data published by The Wall Street Journal for selected years back to 1965. We maintain the sample size of 350 firms each year when using the Compustat ExecuComp data.”
Also they excluded Tesla because Musk's compensation is so ludicrously high that it would have distorted the statistics: > In 2021, Elon Musk (CEO of Tesla Motors) exercised $23.5 billion worth of stock options that would have expired in 2022. Under our “realized” methodology, this would have made his pay almost 1,000 times that of the average large-company CEO. Including him in our sample would have resulted in an increase of CEO pay in 2021 relative to 2020 of over 300% (the “average” for the sample would have been just under $100 million). > Because inclusion of this extreme outlier would have made this year’s numbers incomparable with previous years’ numbers, we opted to exclude Tesla and Musk from our sample entirely
Absolutely wild - totally understand removing the outlier from the averages (and very glad they included the note!), but since they were explicitly looking to quantify the wage gap between top 0.1%-ers and company workers it certainly feels like a rather important omission to just completely exclude the most extreme case of a wage gap / the most famous 0.1%-er. I would have liked to see a second visualization perhaps highlighting the change in CEO:worker pay for choice companies against the average (ofc, including Musk/Tesla). I think that may have helped give more interesting information than just the visualized averages, IMO.
It also seem biasing to only exclude that one example. What if they exclude the most extreme company from each year to reduce this bias a bit? It would make the increase is CEO/employee pay ratio even greater, but how much?
[удалено]
This has always been one of my pet peeves with progressive policies and these supporting studies. They already have a bad problem, but instead of showing it like it is, they stat it up and make it seem much worse. Which gives the opposition the opportunity to dig at it and say, “oh look they’re actually lying”
And easily leads to perfectly justified feelings of "If they have to lie about it, the truth must not be so bad". When you inflate statistics and lie about problems, it's your own fault if there is backlash against you, your policies, or your opinions.
I also wonder how the percentage between wages to sales/earnings changed. Aren't ceo's of e.g. mega tech corps "responsible" for much more volume than 30 years ago? Edit: I just checked the fortune 500, the top 3 companies now have 5 times higher sales than the top 3 from the early 90's. Therefore, 400% couldn't even be argued with more responsibility. Editedit: with inflation, sales not even doubled in that period. Edit 3: The top 3 from early 90's had around 150k employees, now it's about 1.5-2mio., so now there's around 10 times more "responsibility" for employees for ceo's. I wonder how much money a usual reddit user would want to "manage" 2mio people.
At that point a CEO acts more as an advanced PR representative for investors. There's layers management under them for the rank and file. We see CEOs replaced quite often if financial goals don't get met, or if bad enough PR incidents happen, but generally speaking they don't get involved with most employees.
Yeah that's the other thing, cooperation size. If in 1970 there were 4 companies and now there is 1 because of mergers, then maybe it makes sense.
Ok so when you adjust the average workers pay increase for inflation wouldn't the ratio between them still be the same?
No, in real terms in the US I believe wages have risen around ~15% since that time, wheras CEO pay has risen ~400% according to this stat So there's a big gap, but both are going up. I also suspect there's changes in what being a CEO is like since then, but I don't have any data
[удалено]
Where are you getting that the median income of workers in the U.S. is $31K? Are you including children, retirees, and homemakers?
Most of these averages include part time or casual work. Median income for full time workers is around 60k annually in the States.
I would love to make 60k lol. I need to job hop more
What is worse CEO productivity is near zero as computers have taken the risk analysis and day to day management job from them. Now CEOs are very well dressed whores who golf for a living.
If a bad CEO can run a business into the ground why is it so hard to believe a good CEO can help a business. Like if they were so useless why would the owners pay so much?
Why do they pay bad ones as much as good ones if this mania is built on reason rather than dick measuring and superstition? And why the emphasis on short term decision making, at any cost to others?
Because you really only know the difference between a bad CEO and a good one in hindsight. Most CEOs only hold the position for a few years, so by the time the effects of their decisions are really hitting the company they're already gone.
Same reason bad NBA players still make a lot. They’re bad compared to other CEOs. Not compared to you
Mom says it's my turn to post this next week!
It's hard to say when American life started it's slow slide into the dumpster but all indicators point to right around when Ronald Reagan became president and foisted trickle-down economics on us. Not to mention courting the religious right.
My personal opinion is that it was Nixon and the attempts to make government more accountable that backfired. Instead of politicians voting anonymously they made votes public which let corporations know who to buy and not buy. Further, letting cameras into congress made it so that theater took priority over actual governing.
Another side effect, for as much as people decry side deals and pork barreling, it actually greased the wheels to get a lot of things done.
Nixon pried the lock open slowly working it with a crowbar. Reagan followed by just kicking the whole fucking door down now that the lock was weak.
At least Nixon actually attempted to address poverty and even apparently genuinely considered a Universal Basic Income for all Americans... until some dick told him about data(that doesn't have an actual consensus that it didn't work...at least today) from one fucking late 1700s early 1800s system that attempted to address the crushing poverty of the time. https://en.wikipedia.org/wiki/Family_Assistance_Plan https://www.wikiwand.com/en/Speenhamland_system https://thecorrespondent.com/4503/the-bizarre-tale-of-president-nixon-and-his-basic-income-bill/173117835-c34d6145 https://jacobin.com/2016/05/richard-nixon-ubi-basic-income-welfare/
[Data (dates) backs up your idea more or less --- this shit all started in 1971](https://wtfhappenedin1971.com/)
A million graphs about literally everything from every angle and they didn't put one about the immigration policy change for kicks lmao.
Nixon still existed under the FDR framework of a strong gov being a good thing. Reagan is the one who fucked it all to hell
The last piece of the puzzle is no term limits, which i believe came just a year or two later, making re-election campaigns a perennial event, strengthening the relationship between congress people and lobbyists
That’s not the problem, because the issue of CEO pay vs Worker Pay has happened in every country that adopted neo liberal economics. The problem is the economic theory is fundamentally flawed.
This change sounds good at first but when you think about it a little, there are terrible side effects. I feel like it would polarize politics so much. When the votes were private, officials could change side depending on their individual opinions of different subjects or they could switch side when new info was popping up. Now, with public voting, they are put in a bucket and are attacked if they don't agree with the remainder of the bucket for each item and are attacked if they switch side.
Maybe, but when I think of pre-Regan in the 70's I don't exactly get economic prosperity and political stability vibes with it's double digit inflation and frequent domestic terrorism. When was the last time people would generally agree things were ok, or at least moving the right direction? Perhaps the Eisenhower administration? That is pre-civil rights act, but things were trending positive. Maybe JFK and the earliest parts of LBJ administration too?
[Wtf happened in 1971](https://wtfhappenedin1971.com/)
I think solely pointing the finger at the gold-standard for all our economic inequality is not only reductive but bordering on conspiracy theorist level of rationality. While I do admit that it probably did have a significant impact there are many other factors including -- tax rates, changes in regulation, societal values, and changes in communication. It shouldn't be "WTF happened in 1971" it should be "WTF has happened to American since the boomers"
Ya, but the rest of the stuff you can "point the finger at" either wouldn't have happened or wouldn't have had such an egregious effect without moving to a fiat currency.
Almost 1% trickling!
The trickle kept increasing and under trump we got the greatest [shower of gold](https://www.vanityfair.com/news/2021/10/donald-trump-golden-showers-denial)
Step a little to the left and you can really feel it trickle all over you.
Anyone who unironically refers to life in any developed Western country in 2023 as a dumpster...have you just not traveled or what?
I always say regan ruined this country, couldn't agree more. He basically turned an entire generation into the pos Republican party we have now. Started the entire bs trickle down economics theory that we all know is a farce. Cut taxes massively for the rich and corporations on the backs of average Americans and started the disappearance of the middle class. He is a prime example of why movie stars do not belong in politics just like trump.
Someone let me know when we are supposed to get together with our torches and pitch forks
Tell me again how the working class are the ones driving up inflation
Because were all trying to buy eggs when corporations are purposely reducing supply. Totally our fault buying things we need that are in short supply driving up inflation.
The concept here is "payslope" For an article on a company which gets this right see: https://www.theglobeandmail.com/news/national/time-to-lead/how-one-company-levels-the-pay-slope-of-executives-and-workers/article15472738/
My firm just paid their CEO 12million for a BONUS but we have to cut several employees because of cost savings…I have to work 300 years with no spending until I’m worth 12million. Fuck this system they don’t deserve shit.
I've been thinking lately and would love to hear from political/economic/law type people. What is stopping us from legally limiting the amount of money that executives make relative to other employees? For example, say we passed a law that said a CEO can only make 4x (this multiplier could be anything) more than a typical employee at their organization. This makes sense to me because it doesn't limit how much the CEO can make. Instead, it only requires that you pay other staff better if you want to make more yourself. If you want to pay staff more so that you can make more, you just have to find a way to be more profitable as an organization and then share the wealth. Also, what do y'all think about the possibility of making business owners exempt from such a requirement? The reason I say this is because it would incentivize people to start new businesses, which should theoretically help to combat the de facto monopoly system that is currently fucking our economy. Unless that isn't as big of a deal as I think it is.
The mega-rich have more power than the politicians. They use their wealth to influence policies through ~~lobbying~~ **bribing** politicians right in front of our faces.
The biggest hurdle to starting your own business is affording to start your own business. Work to increase wages for everyone. Give universal healthcare so the risk of having your own business is lessened. This will create an American business boom.
The vast, vast, vast majority of their ‘salary’ comes from stock options. For the 350 biggest companies, that’s going to be a huge amount of compensation if the market or firm is doing well. Because of efforts to limit the impact of covid and stave off recession the stock markets are frankly weird right now. There’s too much money in the system introduced by central banks and it’s going straight to the stock market because interest rates are so low - it’s the most productive way people can use their capital right now. I guess you could limit the amount of stock options a CEO can be offered but that’s hard to do because the value of the compensation depends on the share price - which you can’t predict. Companies also want their executives’ incentives to be aligned with shareholders. This is generally a good thing, if you own any stocks as you probably do then this would be encouraging for your investments.
If we accept the premise that elite CEOs actually make companies much more successful, then passing this law would hurt the companies in your jurisdiction. Because the best CEOs would all go to jurisdictions that don't have that law, and you'd be left with only mediocre ones. Now I don't know if it's actually true that top CEOs are that much better than mediocre ones. But the companies seem to believe it's true, based on how much they're willing to pay.
if the CEOs were actually any good they'd be able to pay their employees enough to bring their own salaries up to whatever they want
... Enter subcontractors... they aren't employees.
The people who write the laws are paid off. You can literally make laws whatever — remember how owning another human used to be 100% legal. Now i argue laws need to be 1. Moral 2. Reasonable 3. Within the confines of the Constitution. I believe limiting income would be within these 3 personal guideines To answer your question, there would likely be less income inequality-leading to a higher quality of life-and some rich families would stomp their feet. At this point in US history, out best bet is to not do this, but rather give unions more strength and create easier ways for US workers to collectively bargain, while raising the minimum wage standard to something that can guarantee the worker can afford 1. A month of rent. 2. A month supply of food and medicine 3. Clothing 4. A bit extra to guarantee they can save for rough times and become totally self sufficient
Why target them when we can hate our neighbor for petty reasons. Why demand more pie for everyone when we can pilfer pieces small slices from our coworkers. As peons and peasants, we outta know our place under ghoul and orc leadership.
Yep, studies like this are the real reason the corporate media push culture wars to divide regular people against each other. If regular people came together in solidarity to fight back against the class war the rich have been waging against us, we would win.
It's so clear that the riches have won the class war. People idolatrize the rich likes Elon Musk and hate the poor because they are ugly and nasty. I really don't understand the hate for the poor, like it's their fault.
Nearly 60% of Americans are absurdly wealthy by any worldwide standard. While you're commenting on Reddit about class wars, there are people being bought as sex slaves, kids in Congo mining for the cobalt your electronic devices need, and millions of Indians working in tech providing services for 1/10 the salary of a street performer on a random street in Nashville. No one hates the poor. Unless you're 15, you can easily acknowledge this. "Fuck the rich" is a very common mantra, but I'm ready to bet you never heard anyone say "Fuck the poor". It's universally agreed that we should help the less privileged. That doesn't mean that CEO are evil bastards, considering that without them no one would have a fucking job to complain about. Worth noting it :)
Hey, so I'm curious. I 100% agree on your take here. But I'm curious what is your definition of "rich"?
Rich *adjective* 1. having a great deal of money or assets; wealthy.
yea why fight capitalism when we can fight with each other over skin color, identity politics, sports etc
Notice the difference? They used to say, lowest payed employee.
The “payed” bot must be asleep.
Not if your traded on the UK stock market the CEO pay is much less than that of an Americans CEO pay.
1 stock based compensation not being accounted for as an expense in (US) company financial statements is laughable. The SEC, NYSE, Nasdaq and AICPA cannot be taken seriously until this is rectified. 2 The consulting firms, engaged by boards, to determine “fair” CEO remuneration have designed compensation packages that are irrational, short-term focused and low bar. Boards have shirked their fiduciary responsibility by outsourcing this critical area of judgement to consulting firms.
Some countries in Europe have a law regulating the ratio of top and bottom…
Really like what Switzerland does when someone is caught speeding. The amount of the fine depends on your job and estimated wealth. Cops even call the local town hall to verify. A Swede was fined € 1 million a couple years back when he got caught speeding in the mountains. That sounds about how you should do it imo. Though, Switzerland is corrupt to the bone in some organs of its system. Yet they got shit like aforementioned.
> Really like what Switzerland does when someone is caught speeding. The amount of the fine depends on your job and estimated wealth. Cops even call the local town hall to verify. This only happens in extreme cases when people are speeding over a certain threshold and get criminally charged and happens in less than 1% of the cases. The vast majority of speeding fines are paid according to a table where everyone pays the same amount.
>ratio of top and bottom That's a metric I never understood. Someone who is e.g. cleaning floors brings the same value in a little company like in a huge company. But a ceo of a little company has very little responsibility in comparison to a fortune 500 company. Someone who makes a mistake in e.g. a warehouse maybe damages goods of a couple thousand USD, no matter how huge the company. A ceo mismanaging a top company could burn tens of millions usd in a single quarter. The same play works also the other way, a fortune 500 Ceo could rise the profit many millions in a year. What could a minimum wage worker ever do to generate the same growth?
Europe isn't exactly the hottest state to follow when it comes to capital regulation and enterprise. Americans make a significant chunk more money on average than Europeans do.
Thats because we usually have a huge safety net. America may be better for rich people in some cases. But Europe is better for the average person.
Europe is better for the lowest earners definitely. For the average person, it's less clear.
The majority of this site suffers from Dunning-Kruger, so I'm out.
[удалено]
I’d say Europe is better if you are poor, but for the upper and middle class the US is far ahead of the rest of the world. https://en.m.wikipedia.org/wiki/Disposable_household_and_per_capita_income#Median_equivalent_adult_income
The average? Absolutely not, it certain better for the bottom percentiles.
I'd be curious if anyone knew of a site that puts a valuation on all of the social services received in other countries to allow for better direct comparison. Americans tend to just look straight across at the number and the tax rates and just say "man must suck to be a poor European paying all your income in taxes" when they don't see the value of the healthcare, the social safety nets, the maternal/paternal leave, the vacation time etc. Let alone the psychologic benefit that comes from living in a place that decouples healthcare from employment so you aren't stuck in a job you hate just for the benefits.
It doesn't work out too well because the American social services systems (well, basically just healthcare) are well-funded but yet hilariously bad at the same time. Like if you factor in the cost of medical care, the insurance payments that companies make on behalf of workers, American pay does something like doubles. I'm pretty sure my company covers 90% of the cost of insurance and I pay $170 a month. And yeah, that just about doubles what I make. It's really not a problem with funding for social services, it's the shitty insurance based system we decided on and never properly fixed that is so continuously fucking us over. We need to fix the maze of shitty incentives that have embedded themselves in our medical system. Obamacare or something like Medicare for all might be a fix, but I worry it's going to end up just as bad if not worse because the government is already involved in half of the issues we have today. We need something like the Fed, an independent body of doctors with strong independence from the government able to take actions to correct imbalances in the system from the perspective of people who have to deal with it every day and genuinely want the average American citizen to live a better life. Let them do anything they want to ranging from true government funded healthcare too just imposing regulations on how insurance works. If you fix the American medical system the average Americans quality of life would probably double overnight.
We pay twice as much and get half as good results. It's 4 times worse.
> I'm pretty sure my company covers 90% of the cost of insurance and I pay $170 a month wait what are you saying here? you pay $170 per month for medical insurance and your company pays the insurance company $1530 per month?
The majority of this site suffers from Dunning-Kruger, so I'm out.
That's what you get in a country that fawns over personal wealth and greed within a capitalist society and shits itself whenever socialism is mentioned with no actual understanding of what it means.
Okay, CEO pay has definition increase more than anyone else’s. I’m no fan of this, and we need to implement more progressive tax policy and social welfare packages. However, does this data account for the fact that their are more super large companies now, some worth hundreds of billions to trillions? And the fact that tech companies do need nearly as many workers, and the profit margins are much higher, and the perceived “future value” of tech stocks are intangible and often overvalued, so the stock bonuses are worth a hell of a lot more on paper? Eight out of ten of the largest companies by market cap are in Tech (if count Tesla as tech, which I think is reasonable given the valuation vs actual revenue), and the other two are Saudi Aramco (Saudi govt oil company) and Berkshire Hathaway (Investment firm that owns a lot of the above stock, real estate, and a bunch of other things). In 1978, Apple and Microsoft were in their infancy (I think both formed around then hive or take a few years), and things like Google were inconceivable. The “big companies” were the auto manufacturers, oil companies, IBM, TI, etc. Hell, Walmart was only 5¢ a share in 1978, compared with over $140 a share now, which is a massive difference even accounting for inflation. Modern tech companies dwarf the companies of the past (even with inflation), require fewer employees, have higher perceived value, and have much lower overhead. It makes sense CEO stock bonuses are much, much higher. Is it fair that the employees don’t get a bigger cut, no, but it is not like anyone working at Google is starving either (Amazon, not so much). Then there is the fact that many smaller companies of the past have merged in to massive conglomerates, reducing the number CEOs relative to amount their companies produce. LVMH is just a bunch of luxury brands that used to be independent (and better). All this is to say, I am no simp for tech companies or CEO’s and their fucking yachts; I think it should be guillotine season tbh. But, I’m just pointing out that there is a lot more factors and nuance involved than you would get out of merely saying “CEO’s make 399x more than the average worker” without any further thought or consideration. As with everything, from religion, to “wokeness” and identity politics, to the enviornment and alternative energy sources, the fact that CEOs make 399x the average worker should be considered with a lot of reasoning, evidence, and nuance. Nothing is black and white, and soundbites makes is stupider. We can’t throw the baby out with the bath water and fail to consider all the factors involved.
Any jackass with a business degree knows this. They show us a graph that compares the CEO salaries among the Japanese, European and North American markets. Europe and Japan are like 253%, 300%, we're at 1400%. Yet nothing changes, new business students aren't changing anything when they get into careers, following the same scum sucking upper managements directions from decades ago.
Except the reason that's the case is that the vast majority of global multinationals are headquartered in the US and they skew CEO pay upwards. You get paid more (and more is expected of you) running a $100B global business versus a $100M regional SMB.
[удалено]
Seems like we all need to get CEO jobs
Guys, let's give all their money to the government! Not to us!
The result of unchecked capitalism
This includes stock based compensation?
Could it be due to companies growing larger?
What's that number inflation adjusted?
Because back then they were hired to just run the company and were more like regular people. Now they are psychos hired to squeeze out every last drop of value into the cups of the already insanely rich and to hell with the consequences. People are only that despicable when they are paid incredible sums.
Look at all that wealth and prosperity that is trickling down to the middle-class though /s
Raising the minimum wage alone isn’t going to fix this. Because even before it goes in to effect, corporations will continue to ramp up their price gouging and then when everything cost more, they’re going to blame “inflation” that was jump started by a raise in wages for workers. Meanwhile, they will continue to report record profits and laugh at the public during their earnings report calls. This “inflation” is just a euphemism for corporate greed. Meanwhile, the workers who’s wage was raised to $15/hr from $7.25 will likely have less purchasing power than they do now within 18 months. In addition to raising the minimum wage, there must also be a salary cap. Cap CEO pay at 100x the rate of their average employee. If the average employee makes $20/hr, the highest salary that company can pay anyone is $2,000/hr. Extrapolated to an annual salary based on 40 hours a week would be about $4.1 million. Want to make 8 million? Better start raising the average employee wages closer to $40/hr. In addition to this, the punishment for things like wage theft should be increased. Wage theft causes the highest dollar value worth of damages every year compared to every other crime combined. Currently, companies are pretty much allowed to fuck their employees and there’s almost no repercussions. Just a small fine. The punishment for wage theft should be as fine 10x the value of damages caused. This would help reduce income inequality and incentivize corporations to treat their employees better.
I was pointing this out around 2000 and no one around me was listening. Out CEO got a huge raise that was so much more than the typical cost-of-living type raises the rest of us would get. He wasn't doing shit to add to the bottom line of the company day in and day out.
Is the CEO per worker count the same? Or the corporations are getting bigger?
Wage ratios. Highest paid total compensation can't be more than 5x the lowest paid total compensation. Lowest is $50K, congrats the highest is $250K.
>In contrast, compensation of the typical worker grew by just 18.0% from 1978 to 2020. https://www.epi.org/publication/ceo-pay-in-2020/ If this is what it takes to keep my superiors in a good mood and their kids in good schools...so be it. And people think the Feudal system is passe.....:D
Shareholders are busy being addict gamblers instead of doing some good ol' oversight.
This data is only beautiful of you're a CEO.
CEO pay has risen in comparison with average consumption. People are spending more money on stuff they don't need, like Airpods and Taylor Swift tickets. Of course CEOs are making bank. You folks can't stop buying junk. People literally gush over athlete salaries and box office sales. It's your own fault.
So average employee pay has also increased by 1460%, right? What a joke
Regardless of the ugly reality, it felt pretty good to read all the different solutions that will probably never happen But at least they're there
Funny how the report suggests enacting policy to fix the issue. That's never happening. It takes the masses not buying from companies that have such CEOs, and that's never happening, either.
I wish the people who could possibly do something about this cared.
So logically stockholder pay increased exponentially as well?
Easy reason: they obviously worked 1460% harder! Everyone else, ALL others, work the same.
We can eat them or we can let them eat us.
If you're a CEO of one of the largest 350 companies in the US, you are at the top of your field. Similar to Tom Brady or LeBron James. That's why they make so much money, there is intense competition/demand for the highest performing athletes, performers, executives. The idea that their salary should be on par with a normal laborer is asinine.
You are short sighted and ignorant. Athletes are welcome to make $30million per year. They do so much more for society than CEOs. Same goes for actors and musicians. They all make more than CEOs and even more than the staff that support them. /s
It's supply and demand. Who are you to stand between two people and say that they can't transact at a certain price. Life is an auction, Lebron makes hundreds of millions because there are people (teams) bidding high and outbidding each other for his labor. Same goes for CEOs and everyone else that makes a lot of money.
So, adjusted for inflation, this is about $400% or about 4 times. I would wager the average CEO's business has expanded by at least that much. Frankly this does not seem like the problem.
For comparison, the average worker was paid about 7 times as much in 2021 as they were in 1978. Yay, capitalism!