CEO salary compared to workers

[Mercy Not Sacrifice]

The position of CEO shouldn't even exist.

I object to the idea it takes a rare person to run a business. It just takes training, like any other career.

Well, it takes some leadership as well. But I still contend that a CEO's inherent power is more than enough compensation. I mean, in some businesses, the CEO is basically the monarch of the company.

Joe, wouldn't you mind your dad seeing at least a mild increase in pay, say, 5%?

 

[Joe_Stocks]

Hi Mercy,

Good to catch up with you again.

Joe, wouldn't you mind your dad seeing at least a mild increase in pay, say, 5%?

Of course I wouldn't mind, but that is not my decision. It is the company's decision. And what reason would they have to arbitrarily raise his pay by 5%? It would seem to me that that would be a silly business decision. Like I said before, my Dad unloads trucks that are filled with copper and steel (later used to make transformers). His job is not an overly skilled one and he would be the first one to tell you that. He deserves what he gets paid. He doesn't make what the CEO makes or even close to what the CEO makes. And he shouldn't. A couple of years ago My Dad and his wife (my step-mother) built their retirement house. He is doing just fine without that arbitrary 5% increase in his wages.

 

[yossarian22]

Why do you say that? When has democracy been less favorable than other systems?

? I am not talking about democracy. This is economics, not politics. The two should be as separate as possible

The position of CEO shouldn't even exist.

I object to the idea it takes a rare person to run a business. It just takes training, like any other career.

Just like how everybody can be a surgeon or a jet pilot?
All people are not created equal.
We are not equal. You are better at me in something, and I am better than you at other things.
We are equal in the eyes of law, however, where it matters the most.

 

[Mathematician]

? I am not talking about democracy. This is economics, not politics. The two should be as separate as possible

Workplace democracy is democracy. Capitalists don't want to admit this, but there's no getting around that fact.

On the US Today publication, it said the average American worker makes about $25,000 a year. That's appauling compared to average CEO salaries [$10 million] and what some top executives make [$100-300 million].

 

[Reverend Rick]

If you remove incentive you reduce competition. Reduce competition and you have monopolies. Monopolies raise prices for the consumer. Everyone is a consumer so we all lose. Just look at the phone company. There used to be a monopoly and everyone had a black phone with a party line. Caller ID, call waiting, DSL, distinctive ring, are features that could have been available 10 years earlier if deregulation has happened sooner. Back in the day, you had to use the phone companies phones. You were not allowed to buy your own phone and use it. There was not many choices for different phones because there was no incentive to provide enhanced services.

Cell phone companies are another good example. If there was no competition, we would all be paying 50 cents a minute for air time. You make think CEO's salaries are too high, but without the possibility of unlimited income, research and development would grind to a halt. Wireless internet and I-phones would not exist.

 

[Mercy Not Sacrifice]

Hi Mercy,

Good to catch up with you again.

Of course I wouldn't mind, but that is not my decision. It is the company's decision. And what reason would they have to arbitrarily raise his pay by 5%? It would seem to me that that would be a silly business decision. Like I said before, my Dad unloads trucks that are filled with copper and steel (later used to make transformers). His job is not an overly skilled one and he would be the first one to tell you that. He deserves what he gets paid. He doesn't make what the CEO makes or even close to what the CEO makes. And he shouldn't. A couple of years ago My Dad and his wife (my step-mother) built their retirement house. He is doing just fine without that arbitrary 5% increase in his wages.

Even though labor is the heart and soul of an industry's operations?

Workplace democracy is democracy. Capitalists don't want to admit this, but there's no getting around that fact.

Mmmh...explain...

On the US Today publication, it said the average American worker makes about $25,000 a year. That's appauling compared to average CEO salaries [$10 million] and what some top executives make [$100-300 million].

Where was that graph I saw the other day that showed the ratio of CEO salaries to workers' wages in several Western countries, and the US stood alone, basically off the chart?

 

[Joe_Stocks]

Hi Mercy,

Even though labor is the heart and soul of an industry's operations?

Yes, arbitrary raises would kill labor and thus destroy the heart and soul of any indusrry's operations.

 

[Mercy Not Sacrifice]

Yes, arbitrary raises would kill labor and thus destroy the heart and soul of any indusrry's operations.

Depends on what you mean by "arbitrary." Companies have a host of methods of saving money that do not involve reducing labor's wages.

 

[Joe_Stocks]

Hi Mercy,

Depends on what you mean by "arbitrary." Companies have a host of methods of saving money that do not involve reducing labor's wages.

The way you put it, it sounds very arbirtrary. Just raise his wages 5%, that'll be fine. You are right that companies can do a lot of things to save money (besides cutting wages) and I believe that decision-making power should stay with company. People that are advocates for social and economic justice usually know very little about running a business.

 

[yossarian22]

Workplace democracy is democracy.

If you are a stock holder, then you get a say in who decides company policy.

On the US Today publication, it said the average American worker makes about $25,000 a year. That's appauling compared to average CEO salaries [$10 million] and what some top executives make [$100-300 million].

Guess which job takes more expertise.
If your talent is not easy to find, then you will be payed more. If your talent is common you will be paid less. I see no reason why a janitor should be paid the same as a surgeon.

 

[Mercy Not Sacrifice]

The way you put it, it sounds very arbirtrary. Just raise his wages 5%, that'll be fine. You are right that companies can do a lot of things to save money (besides cutting wages) and I believe that decision-making power should stay with company. People that are advocates for social and economic justice usually know very little about running a business.

I'm confused where you're going with the whole "arbitrary" thing. Unless a company is careless (which does happen), they always factor in such decisions to how that will affect their bottom lines.

What about empowering workers to make decisions that affect the P&L statements? If you proactively get them to help increase your profit, then improving the company's financial statement no longer comes across as the big dogs bossing everyone around, no?

 

[Mathematician]

If you are a stock holder, then you get a say in who decides company policy.

Three problems. 1.) Stocks and corporations are inventions of the state. They don't exist in anarchist markets. 2.) Getting a say in who decides company policy is not the same as actively employing democracy, and in fact unless you own a large number of shares you have no real say 3.) The means of production should be owned by the community collectively, because commerce involves everyone indirectly as consumers and directly as workers.

Guess which job takes more expertise.
If your talent is not easy to find, then you will be payed more. If your talent is common you will be paid less. I see no reason why a janitor should be paid the same as a surgeon.

No one on this forum has argued for a janitor to recieve the same wage as a surgeon. It's a strawman. It doesn't take 10 million dollars to make decisions. That position wouldn't even exist in a truly free market in the same way a representative wouldn't exist in a real democracy.

It's authority that doesn't need to be, and as such it should be rejected.

Cell phone companies are another good example. If there was no competition, we would all be paying 50 cents a minute for air time. You make think CEO's salaries are too high, but without the possibility of unlimited income, research and development would grind to a halt. Wireless internet and I-phones would not exist.

To begin with, unlimited income doesn't exist under capitalism. No one has serious aspirations for 1 trillion because it's close to impossible. It all depends on how the markets are structured [or in the case of socialist/anarchist markets, unstructured].

 

[Shadow Wolf]

Why would we limit the ability of anyone to be all they can be? If you want to make it big, you have to think big first. If you think in terms of the least you can be, that is truly sad.

I don't agree with wage caps, but isn't it abit funny how the average baseball player makes more than the president, who has the burden of running a nation, does just to catch and throw a ball around and hit it with a stick once in awhile?
It's also a shame that CEOs make all the money, while the people who done the labor to make the CEOs position available, make much less and pay more taxes.

 

[Mercy Not Sacrifice]

The movie The Corporation brought up a great point about the ethics of having only the shareholders decide a company's course of actions: People who are affected by what the company does, sometimes to the point of life-or-death situations (see the health insurance conglomerate), have no say in the process. They are defenseless.

While asking for corporations to follow simple rules of respecting humans, the environment, and society might come across as "liberal" to some, for others it comes across as "accountability."

 

[Joe_Stocks]

Hi Mercy,

I'm confused where you're going with the whole "arbitrary" thing. Unless a company is careless (which does happen), they always factor in such decisions to how that will affect their bottom lines.

What about empowering workers to make decisions that affect the P&L statements? If you proactively get them to help increase your profit, then improving the company's financial statement no longer comes across as the big dogs bossing everyone around, no?

It's just the way you put it. Like the company should just give out raises. I think that kind of behavior would be silly. Something like wage incentives are really useful. At my father's job the company used to offer incentives for increased production. But the new management has taken them away. Production has suffered. That is not surprising. But that choice is up to the business. If it wants slower production without worker incentives over increased production with worker incentives then it can make that choice.

 

[Reverend Rick]

It's also a shame that CEOs make all the money, while the people who done the labor to make the CEOs position available, make much less and pay more taxes.

Luke you have it backwards. The Chief Executive Officer of the company is the rain maker. Without his or her ability to find and supply markets and investors, there would be no jobs to begin with.

Employees jobs are just a by-product of commerce no greater than the emissions the factory emits. The sole reason for corporations is not providing jobs but providing investors with acceptable returns. No return on investments = no CEO salary. The greater the returns the greater the salary. Investors want large returns on their investments, so they provide the ultimate incentive to the CEO who make it all happen for everyone.

I believe the real issue here is the low wages of the employee and not the high wage of the CEO. The CEO takes responsibility for his wages as should the employees.

The CEO maximises their potential and sells their services to the highest bidder.

The employees must not put much value on education or sellable skills, and sure is not marketing their services very well. CEO's pay very high salaries to Vice presidents and managers who do value their ability to perform in this highly competitive market.

Most of these Vice Presidents are not satisfied with their position or their pay either and have something in common with the lowly employees. The difference between them is, they are gaining experience in the corporate world and leave the firm with skills they learned from the CEO.

One day, they will be CEO's themselves. You have to aspire to be successful to ever begin to be successful. Aspiring to be uneducated and unskilled working FOR SOMEONE ELSE, is a sure fire way to take the fast lane to poverty.

 

[yossarian22]

Three problems. 1.) Stocks and corporations are inventions of the state. They don't exist in anarchist markets.

And what do you base this on? There has never been a truly anarchist market.

2.) Getting a say in who decides company policy is not the same as actively employing democracy,

It is representative democracy. You want a say in what a company does put money in it.

and in fact unless you own a large number of shares you have no real say

The people who have the most invested in a company should get the most say about the companies policies.

3.) The means of production should be owned by the community collectively, because commerce involves everyone indirectly as consumers and directly as workers.

So how do the factories improve under such a system? They don't. There is no reason to improve. It does not matter to the worker. Such a system relies on people caring more for the community than about themselves, which won't happen. All it does is ensure inefficiency

No one on this forum has argued for a janitor to recieve the same wage as a surgeon. It's a strawman.

They argue him getting the same say, which is equally ridiculous.

It doesn't take 10 million dollars to make decisions.

If everybody was capable of making such decisions you would be right. But not everybody can. If you have a talent which is rare and in demand, you get paid more.

That position wouldn't even exist in a truly free market in the same way a representative wouldn't exist in a real democracy.

Representation only exists because it is infeasible to give everybody a say in every matter.
And there never has been a truly free market, nor will there ever be.
I would enjoy hearing your logic behind that idea though.

To begin with, unlimited income doesn't exist under capitalism.

Or anywhere else. To have unlimited income means there must be unlimited resources.

 

[Reverend Rick]

To begin with, unlimited income doesn't exist under capitalism. No one has serious aspirations for 1 trillion because it's close to impossible.

Have you ever heard of Bill Gates?

 

[Mathematician]

Have you ever heard of Bill Gates?

That's more than 15x Bill Gates' worth in assets.

 

[Mathematician]

They argue him getting the same say, which is equally ridiculous.

Then you don't believe in the equal worth of individuals. The high school drop-out and Harvard grad get one vote in social issues. Advocating the Harvard grad having more power than the drop-out is not democratic.

And what do you base this on? There has never been a truly anarchist market.

Define "truly anarchist market." I base this on the fact it requires a state to recognize the stock system. Shares, like copyrights and patents require a legal system to "exist."

It is representative democracy. You want a say in what a company does put money in it.

Workers do put money in it. In fact, they're the ones making the money.

It's representative democracy without the democracy and limited representatives.

Representation only exists because it is infeasible to give everybody a say in every matter.
And there never has been a truly free market, nor will there ever be.
I would enjoy hearing your logic behind that idea though.

Real democracy could certainly exist. It's infeasible if you believe in a class system.

The people who have the most invested in a company should get the most say about the companies policies.

The CEOS making millions each year could have the company crash and burn and still get off better than the workers.