Published: Wednesday, May 28 2014 4:10 p.m. MDT
If a CEO increases the value of his company 1000 times more than I do, he should
be paid 1000 times more than me.I have worked as a janitor and
burger flipper in my early years. At times the companies I worked for were very
very successful. And yes the CEO's work increased the value probably in
the ballpark of 1000 times the value of my work.It would be lazy of
me to cry about how much money he was making when he was making the company 1000
times more profitable than I was making it.Lets not be lazy and
suggest the rich give us what they've earned, lets instead look in the
mirror and make ourselves more valuable to MERIT a higher wage if that's
what we're seeking
"21 The eye cannot say to the hand, “I don’t need you!”
And the head cannot say to the feet, “I don’t need you!” 22 On the contrary, those parts of the body that seem to be weaker are
indispensable, 23 and the parts that we think are less honorable we
treat with special honor. And the parts that are unpresentable are treated with
special modesty, 24 while our presentable parts need no special
treatment. But God has put the body together, giving greater honor to the parts
that lacked it, 25 so that there should be no division in the body,
but that its parts should have equal concern for each other. 26 If one part
suffers, every part suffers with it; if one part is honored, every part rejoices
with it."No CEO increases the value of any "corporation"
by their own, solitary actions. No CEO deserves a thousand times more
compensation than others in the company. Feudalism was supposed to have been
left on the scrap heap of history.
I AM LDS 2So should CEOs get paid the same as the employees? Why should CEOs not get paid much more? They've generally had more
experience, more education, and more contribution than the "normal"
workers. Drinking a quart of pickle juice every time someone gets
something that you feel is unfair is not the way to live life. If you want what
they have, do what they do/did. It's that simple. If you don't feel
you are being treated or paid fairly, speak up. Have the courage to address the
problem as you see it. Or just have the courage to say adios and leave
completely for something else.
They shouldn't be paid that obscene of an amount for 3 reasons:1)
NOBODY needs that much pay. At some point, having too much wealth becomes a
detriment to oneself.2) Aspiring to positions that generate so much wealth
can lead people to believe (incorrectly) that sunshine flows out of their body
in rainbows. Also detrimental to oneself as well as to the rest of us exposed to
them.3) This kind of incentive drives short-range thinking, which in
striving for short-range, quick compensation goals, can drive the misconception
that short-cutting and "bullying" behavior is a desirable thing in
execs. (See other DN article about criminalizing bullying behavior by kids).
Amazing. I'll bet not one of them can dunk a basketball.
The actual value of a corporation is the synergy of the contributions all
employees make, from the bottom to the top. The actual value is derived from
the team effort--a CEO could not *ever* make $x million without the work of a
lot of other people in the company who are paid far less, and without being
endowed with a strong economy that provides the market the company needs.Setting the relative salaries within a corporation is a question of
taking the total gross profits that the team made, and dividing it up.
CEO's make a ton of money because they are good at negotiating their piece
of the pie--not necessarily because their isolated efforts magically make the
pie bigger without the hard work of the rest of the team.Here is the
question: is it good for the economy for so much of the nation's income
going to the top 1%? Looking at the 20th century, the economy did the best when
more money went to a strong middle class.
a bit of reality needed - A company could not *ever* make a lot of
money for the owner shareholders if the only skills brought to the table were of
the entry level type.There is a huge difference between the value an
entry level janitor adds to a company vs. the value a top executive can make.Just because a janitor is needed and a CEO is needed doesn't
suggest anything about their compensation being anywhere similar.If
that janitor wants to make more money, he/she should develop more skills to
merit a higher wage.
@GiuseppeG - "NOBODY needs that much pay." So says the person who
doesn't make all that money.
The question here is how much compensation does one person require. Most of the
compensation of the uber rich is taken out of the economy. This stifles
economic growth and limits the availability of dollars that might otherwise be
distributed to others within the company. To limit these obscene levels of
compensation a tax of 90% over and above the one million dollar level should be
enacted. This would benefit the companies in question and the overall economy.
Chris B.,Of course there is a huge difference between the skills of
a CEO vs. the skills of the janitor. I'm not suggesting everybody ought to
make the exact same dollar amount regardless of their skills and actual
performance. What I am saying is that the long-run prosperity of the nation
requires a strong middle class.Over the last 30 years, the average
salary of CEO's has increased by something on the order ten times, while
the average salary of a worker hasn't increased at all. Why do you think
that is? Is it because CEO's are now 10 times smarter than they were
before? They are ten times better leaders? Are they working ten times as
hard?In contrast, do you think average workers haven't
increased their productivity at all over the last 30 years?I'm
strongly in favor of a free-market, competition-based economy. But we should
recognize that too much wealth being concentrated in too few hands is
detrimental to the system.
Waiting for burger flippers to start chanting "We can't survive, on
seven twenty five!".
reality,Keep in mind that the ONLY reason the owners and board of
directors of a company will pay a CEO 10 times more than they were paying them
30 years ago is if that board of directors thinks that such an investment will
pay off the best for the company. Those owners aren't going to
pay the CEO more than they need to for the same expected output, because
remember what they don't pay the CEO ends up back in the pockets of the
owners.Yes, I do think its very possible the gap between the value
of top CEO's and the value of janitors has increased over the last 30
years, and if it has it makes sense that the gap between their wages has
grown.Those rich greedy owners want the most money for themselves,
and they'll only be paying in their minds what the CEO is worth. Sure, they
are wrong sometimes. But they're also wrong about the quality of their
janitors sometimes.You seem to be suggesting that the owners
don't want money and are choosing to just give it to the CEO's instead
of the janitor
What has changed over the last 30 years has been the understanding of what
reasonable pay is for workers and executives. Note that in many European and
Asian nations, the gap is not nearly that wide and they have world class
products and corporations (so somebody is adding value somewhere other than at
the CEO level).
It is much more upsetting to me, that welfare people get higher increases and
better benefits than I do, working full time.Explain the fairness in
that?I've talked with many people who were or are on welfare.
They have it much better than I do. Why can't I at least be given food
stamps and eat steak like those that don't work?The people that
are getting screwed, are the people that are working.
Chris B.,The specific mechanics of how the bonuses of most CEOs is
calculated and the pockets out of whom it comes is a lot more complicated than
your analysis suggests. In the real world, do you really think individual
“greedy stockholders” are going to go to war about an executive
bonus that is less than a penny a share?On a fundamental level,
employees at every level take home what they negotiate. It turns out CEOs are
extremely good at negotiating salaries and stock options with their friends on
the Board of Directors. In the real world, individual stockholders have very
little ability and even less incentive to hold the Board accountable. To clarify where I'm coming from, I'm writing from the perspective
of a powerless stockholder who is the one actually paying the CEOs. I am here
to beg fellow stockholders and the Boards that allegedly represent me to bring
some sanity to the system.The assertion that salaries and bonuses
are derived by wise, fair, efficient, and unrigged market forces is naive.
Because CEO's have a right to extract whatever financial package they can
get from their boss and view anything they pay in wages to those below them as a
liability to be minimized at all costs does not make it the right thing to do.
To pretend that the current differential between salaries of upper management
and the average worker is anything other than greed is living in denial. The value a company and its leadership places on its employees can be
measured directly by the compensation package they provide. Costco values its
employees WalMart does not. Neither company is required to treat their
employees in the way that they do. Both companies are in business to make a
profit,Costco simply places more value on their employees than they do the
"Currently, of the largest companies in America (those in the S&P 100),
CEO pay has no correlation with either performance or market
capitalisation." The Economist, Feb 7, 2012.
Reality,You bring up some good points. However, janitors also can
learn to negotiate along with other skills they develop. Negotiation is
important at all levels. And I will add that if a top CEO only made
half his current salary, it would be naive to assume that money saved would or
even should be given to lower employees. Instead, it would and should stay with
the owners. My point is that a lower level employee is not being
treated unfairly simply from the fact the CEO make a high sum of money. If a lower level employee can't find a position anywhere that pays
them more than they are making, it's because the value they add
doesn't merit more money. It's not because the CEO makes a lot.
And the point of this story is what??? There will always be some people that
make much more money than others, none of these people were born rich, they
worked for it. I get tired of people being demonized because they were
successful in accomplishing the American dream.Why is no one complaining
about the money paid to actors for a movie or to an athlete for playing a sport.
We could all go to the movies cheaper or the game cheaper if they weren't
paid so much money.Why are we not complaining about politicians that are
poor as mice until they are elected and then just like that they millionaires.
I work for super, crazy rich people. I mean REALLY rich. We're talking
BILLIONS. You know what those greedy people do? (Besides having work for me to
do and providing me with health insurance and giving me profit sharing and
matching my 401k)? Each year, they match what I donate to charity. With very
few restrictions, they give me money to give away to people I see fit to give
to. Amazing. So we could tax them more and see to it that the money gets lost
in the cracks of the Pentagon and the Department of Education, or we could not
worry too much about how profitable they are and trust that they are doing good
tings with their money.
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