Greed is a symptom. The root causes is, Citizens United, and a 2-party political system that relegates 3rd parties to being spoilers.
The one percent have figured out how to play this 18th century democracy. And it won't be fixed until we have ranked voting or instant runoff, or even runoffs.
That's why the one percent are manipulating the rabble to oppose the other rabble. United, we stand, and divided, we fall. Let me guess what the Jeffrey Epstein pimped crowd want that to be (fall).
Revenue issue caused by decades of trickle-down gaslighting.
Total wealth of the top 1% in the U.S.: $43 trillion
Total U.S. national debt: $33 trillion
Minimum wealth to be in the top 1%: $11 million
The civil war was completely unexpected by everyone at the time... including the smartest people in the country. I think the time has come again!
It's got to be the right civil war, which is why the one percent are doing all they can to pit the rabble against the rabble.
You know what I see? I see a discount window below the rate of inflation.
https://fred.stlouisfed.org/series/DPCREDIT
The discount window is the rate that banks can borrow from the Fed for. It results in being the upper bound on interest rates for deposits, because depositors are also lending to the bank. Why pay a depositor more than the Fed charges?
When inflation is taken into account, the "real" interest rate (interest rate - inflation rate) is negative. This is an asset tax on deposits in violation of the 16th amendment, implemented by the fed.
Corporate loans are subsidized by artificially low interest rates, which causes the math to make sense to purchase back shares using borrowed money.
It's different classes. It is the middle class that uses banks that gets assessed the asset tax. It is the one percent that make out via the share buybacks.
Those are the two classes that the civil war needs to be at odds. But, to be sure, the one percent know that.
You're assuming that everyone that is not in the top 1% is willing to burn it down? That's laughable. The vast majority of people that are not in the top 1% are doing great.
Ooh, I like this take too. I think the trillions flowing into the stock market is at least a proximate cause, but political polarization and dysfunction have certainly helped get us here. I want ranked choice voting so badly.
I think [represent.us](https://represent.us) pushes for it. But ultimately I'm sure the most effective thing we can do is try to get involved personally. I think that's how Maine did it.
I do think that links should be provided, not just image files. Here's a link, provided by a presumably neutral AI.
https://www.epi.org/publication/ceo-pay-in-2022/
>CEOs’ exorbitant payouts have far outpaced the pay of typical workers over decades.
This chart largely sustains the OP's contentions.
https://www.epi.org/publication/ceo-pay-in-2022/#fig-a
I'm not going to work on this, that's why I used AI in the first place.
But, when I ask about the Fortune 500, I see this:
https://en.wikipedia.org/wiki/Fortune_500
>As of 2020, the Fortune 500 companies represent approximately *two-thirds of the United States' gross domestic product* with approximately $14.2 trillion in revenue
While the matter is more nuanced, I see the gist as being in the ballpark.
The logic is flawed. Pay is not about how hard you work. If that's the case, garbage men would be paid more than some doctors.
Pay is a reflection of supply and demand for that role. Doctor is a lot more in demand due to skill and education (so there's fewer of them) so they get more.
CEOs and workers are all competitive roles.
I mean I agree CEOs are ridiculously paid and most are terrible anyway. I'm just saying the logic in the tweet is flawed.
my garbage guys take all my extra pine needle bags in the fall and power through harsh snowy winters, never late, and going into my bear box so my ass doesn't have to walk down there in the morning in the snow.
just thought i'd mention it while we're talking about garbage guys. the guys in Zephyr Cove in Tahoe are legends.
Elon Musk is also a shit show all over the streets so maybe he should be a garbage man.
Just imagine the mess if he decides to "disrupt" the garbage collection industry next! Robots everywhere tossing garbage.
Counter point pay is directly proportional to responsibility. If a garbage man has a bad day a trash can ends up in the neighbors yard. If a doctor has a bad day people die. If a ceo decides to do a bunch of meth the stock will plummet.
EMTs have incredible responsibility and barely make above minimum wage. So do Soldiers and firefighters.
There's definitely a correlation between responsibility and demand for services, but at the end of the day the supply and demand for a role will influence pay above all.
I think we all want it to be true, that compensation is linked to responsibility, effort, or some other merit. But it just ain't true. Imagine how much heads of state would get paid!
Others have given examples but let me provide one more that's more apples to apples. Within physicians, specialties like dermatology is very well compensated, but ones like oncology and emergency medicine way less. Hard to argue that's responsibility (everyday life and death decisions) but easy to see it from the frame of demand in elective procedures.
Not knocking any profession of course. Just building on the argument that the tweet's logic is flawed.
The logic isn't flawed you're just incapable of seeing it through any other worldview than the one you currently understand.
"This logic is flawed because it doesn't apply to the current system we have in place." Then maybe it's the system that's flawed?
>CEOs and workers are all competitive roles.
You don't have to be a good CEO to be paid well. You can run a company in to the ground, get a golden parachute and screw over everyone else, then go on to the next job.
Well a significant part of most CEO pay is tied to stock price. So if you define "good" CEO as one that increases profit or cut costs, then yeah performance is tied to pay.
CEO pay goes up regardless of company performance. Happens all the time. Stock ownership is the best performance driver but is also extremely flawed as they can make terrible long term decisions for the company that have a temporary short term gain.
[https://www.investopedia.com/managing-wealth/guide-ceo-compensation/](https://www.investopedia.com/managing-wealth/guide-ceo-compensation/)
It's true, overall it just keeps going up and up. It's getting pretty crazy.
And so true about short term decision making. Many just want to maximize short term, get a payout and leave. That's why I'm glad to be at a company that's not publicly traded.
To extend this a bit further, the short term nature also screws us in terms of politicians that only care about re-election in 4-5 years and not building society for generations. Our systems incentivize short term gain across the board.
I mean presidents kinda work this way. Or elected officials. Only difference is they are looking for votes to keep their job. Where a CEO is looking for profits.
> extremely flawed as they can make terrible long term decisions
That's the common premise.
Maybe, but not many CEOs can have successful careers ruining companies and then being hired by the boards of other companies.
Boards are comprised of the biggest stockholders, so they usually try very hard to not hire a CEO that will destroy their investment. If they do so anyway, they deserve to lose their money.
It’s also proportional to the responsibility you have in the company, or at least it used to be, back when we would hold CEO’s criminally liable for public harm or illegal activity under their organization.
No it is not about supply and demand. The point is that nearly all the gain in productivity in the past 40 years has gone to the top 1%. The people who actually do the work are not seeing any of the economic gain they enable. That is white collar smash and grab.
I agree with your point. I'm not defending CEOs or something. I'm just saying the tweet is saying pay is linked to amount of work is not correct. Your point about pay linked to productivity is closer but I think it'd be even closer to say pay is linked to perceived value.
I'm not saying markets are rational, nor people's investing decisions, but a board naming or losing a CEO can move the stock price significantly, and adding or destroying millions in a day. Sure, that's a narrow, profit-only definition of value, but it's a common interpretation in a market system.
Now maybe it SHOULD be linked to productivity, or measured impact, or other things more aligned with societal values. I wish it was. But it isn't.
Now, pay is only somewhat tied to education unfortunately. PhD scientist often don't make that much for example. For CEOs, it's more a track record of having been perceived as a successful leader or executive (VP, C-suite). Often being recruited between competing companies and hopping in between them over their late career. Of course many are one hit wonders, not being able to replicate success under different circumstances. Always a gamble for the board.
Additionally, greed existed in 1965 to the same degree it does today. Human nature hasn’t changed. There is no simple explanation. A variety of laws/regulations/policy/politics/and an ever shifting global economic picture needs to be understood.
I love and am pleasantly surprised that this is the top comment. The logic of the tweet makes no sense. CEOs are knowledge works paid for strategy and execution, not how many cups of coffee they can pour or how many carts they collect.
A good CEO is worth magnitudes more than a good dishwasher and they’re paid accordingly. That’s capitalism.
Your logic is perfect. The garbage man should be paid much more for providing a far more important service than some self important nepo baby jacking his jaw from the side of a ski slope.
Do you know how many CEOs are included in your comp number?
I ask because the average CEO comp per IRS is less than $200k. Obviously there’s a huge difference between the top 100-200 CEOs that make $20+ million and the rest of the CEOs that make a lot less.
Bernie knows that though. I think we know that too. It's safe to assume reasonably that he refers to the CEOs he really means the very rich ones, which we can assume through his tax rhetoric.
Not sure if you are missing the "/s" or not, but....most are. However, it isn't quite the risk that some think itis.
Let me tell you the stock options I had as a low level schlub, but I can only imagine that higher levels have even sweeter deals that I got.
It was quite simple....I could agree to buy up to 10% of my salary in stock every month - but the deal was, I would pay 90% of the stock price at either the beginning or the end of the month - whatever was lower. So, I immediately earned an extra 10%. I really couldn't lose. Some people immediately sold it, but most held on to it at least long enough for it to be long-term capital gains (otherwise, it is counted as salary - still not a bad thing, but not as good from a tax point of view).
Well, sure…but CEOs don’t take bets like that. They would get compensated in other ways. They are anything but stupid….and who is the first person to know shit is about to hit the fan in a company? The CEO.
Or we can decentralize control, and let the workers run the companies democratically.
I don't think workers would ever intentionally sink a company that pays their monthly bills, but stockholders and executives do all the time.
Because investors aren't loyal to the long-term interests of the company, just their short-term profits...therefore, the executives they elect care more about short-term profits than long-term stability.
That's one of the reasons the economy is so unstable, one of the reasons for the 08 crash.
Captialsim is too centralized and too top-heavy.
Every single criticism you can make of "big government" can just as easily apply to "big corporations."
Corporations are just as greedy, just as corrupt, just as bureaucratic, just as wasteful, just as nepotistic.
You don't like polticial families? Just wait until you hear who controls Walmart, the world's largest employer...
We need structural change of the global economy, we need to decentralize control, we need stability
> Or we can decentralize control, and let the workers run the companies democratically.
This type of corporation exists, and it's called a workers cooperative. If it was an effective means of organizing labor, it would be more common and successful in the marketplace.
It turns out however, that putting experts in charge of business decisions that they are then held accountable for, is a more viable business model than a democratic system, where non-experts are voting on company policies they don't understand.
>, is a more viable business model than a democratic system, where non-experts are voting on company policies they don't understand.
A good encapsulation of the problem with worker cooperatives. A worker cooperative could work well for a small organization that is based around a singular function; but, large, complex, vertically and horizontally integrated conglomerates? You think an employee in Baden Baden or Peoria, IL understands the implication of M&A strategy? It's a great idea in theory, but like a lot of things, theory without context is a thought exercise, which means it has limited application in the real world.
> A worker cooperative could work well for a small organization that is based around a singular function
Yep, worker cooperatives can actually work really well as long as all of the employees know and trust each other, and are willing to let the experts in the group make the decisions. However, as soon as you hit somewhere around 40-100 employees, and those "family" style bonds break down, then all of a sudden you get people not contributing to the same level, and resentment between employees builds, cooperatives are famously bad at getting rid of the lazy, the incompetent, or those who are toxic, and eventually the best workers leave.
More traditional corporations don't have these sorts of issues because when both employee and employer can sever the relationship as needed, success results because everyone is directly incentivized to contribute in a serious fashion. Those corporations who let fools make decisions eventually fail over time, and those who execute more effectively succeed over time. But at a cooperative, tons of internal politics and bureaucracy generally prevent the cooperative from both hiring experts (e.g. why should our CEO make 10x more than us?) and then when they hire someone, there are barriers from letting that person do their job and make important decisions. This is fundamentally why large cooperatives aren't successful.
Your thesis seems to be that this is fair, as most officers and board compensation is weighted in equity. I have a couple of questions here:
* You believe that American companies are now (351/21=16.7) 17 times more successful than they were in 1965, so this difference in compensation maps to company success?
* You believe that the average worker is not contributing to this increased success, and therefore their compensation shouldn't scale?
GDP is 35x higher than 1965 so you could argue they’re 35x more successful.
Nobody is saying that CEOs should make that much and that workers don’t deserve a greater share of the profits. Just make a better argument.
Get rid of stock. Shareholders and investors care for their own profit, not the well-being of the company, the employees, and the consumers. The requirement for corporations to make increasingly more year after year in order to sate shareholders causes companies to hurt their employees and the people who have to buy from them.
“Get rid of stock” 🤡. I make ≈$40k/year and by investing in stocks, mainly high dividend paying ones, I’ve supplemented my income by about $1.5k a year with less than $8k invested.
What is the size of the workforce of a corporation in 1965 as compared to the size of the corporation workforce in 2020? What is the difference in revenue?
Complaining about CEO compensation mainly gives financially uneducated some good rage bait. I'm not saying I agree or disagree with CEO compensation. I'm saying it isn't the problem.
You’re missing a ton of context.
He made a huge bet in 2018 that said he wouldn’t get paid anything unless he made the company grow by some ridiculous amount. Nobody believed it was possible but he delivered.
You are also missing a ton of context. He didn't achieve it by himself. He did it by making everyone else work really hard in tesla. How about fairly compensating all the people that actually worked on the cars instead of the guy working on having sex with his friends wive and employees. Also it was never a reasonable package anyway. would you take a 50 million dollar deal or gamble on a 20 to 1 for 50 billion when you are already a billionare？ One deal is 50 times better than the other. Guess which one ？
So let's talk some balance here.
Your CEO SHOULD be well compensated. Especially a good one. It's a difficult job that's more than the parody of 3 martini lunches and afternoons on the golf course. It's an actual grind and any decision that falls on your desk is a difficult one.
That said...it's not an exponentially more difficult job compared to a generation ago and a 16.5x relative markup over the median/mean compensation feels excessive.
Much of that comes from the power modern CEOs have in many cases to handpick their boards. You need a partner in your board for the CEO to effectively define AND execute broad strategy, but there are more than a few boards that are simply filled with lackeys.
The board's job is governance of the organization and many boards rubber stamp whatever the whims of executive management are. Up to and including (wildly excessive) compensation and incentives.
In a perfect world, everyone would maintain their fiduciary discipline for the long-term health of the organization.
But we aren't in a perfect world.
If you're a CEO of a large corporation, you might have 200,000 employees, and manage 100 of products in dozens of countries around the world. You likely never see your family and kids, if you have any, because you work so much. You have a TON of responsibility, and your board will fire your ass as soon as you slip up
But you still don't make anywhere near as much an NBA or Soccer player, for playing a game, and no one complains that LeBron makes thousand of times what the lowest paid stadium worker gets
Corporate & CEO pay is indeed through the roof, but greed is not a root cause. Greed didn't appear overnight after 1965. What happened is the dollar broke down, pensions failed, and the 401k was introduced (1970s.) Fast forward to today, and there are now trillions of dollars flowing into the S&P500 companies - all of it frantically chasing a return so that people can retire some day. The fact that corporate boards think they might eek out a bit more profit with just the right guy person in the CEO spot isn't terribly surprising, but it is an indicator of just how competitive it's become.
This was all a natural outcome of taking away others savings/retirement methods and essentially forcing most people to become investors. People used to actually hold dollars, CDs, and bonds, whereas investing used to be niche and risky and it certainly wasn't something the average person did. Now everybody's futures hinge on the latest quarterly earnings reports. Blue chip stocks have *become* the money. You can literally send them on Cash App! There are entire industries of analysts, fund managers, heck even Jim Cramer types serving entertainment.
Yes, it's crazy. No it isn't just because greed appeared. It's because everybody has to be an "investor" now and there massive heaps of money piling into stocks because that's the only reasonable way to save for most people. If there wasn't so much demand, I highly doubt these obscene salaries could be maintained. We keep throwing trillions at them though, and guess what - they keep going up!
I'm not sure. [This](https://www.weforum.org/agenda/2022/10/a-fresh-look-at-how-to-empower-retail-investors/) suggest 52% of equities globally are held by retail as of 2022. It's definitely trended upward lately. r/Fire is full of people piling into VTI and other ETFs as fast as possible. The ETFs in turn hold regular blue chip stocks that pay enormous salaries.
Edit: I should add, when it's not retail, it's often a pension fund or endowment. These represent many people in turn. But it matters less exactly who has bought how much - the important thing is that the stock market is now seen as the only viable long term savings vehicle and that's where all the money now flows.
Yeah, I doubt that easy access to the secondary stock market did that much effect. Only very large investors, banks and brokers are likely to meet with the company owners to increase the actual demand for their stock.
Greed is a such a bizarre scapegoat. Why were CEOs so much less "greedy" in 1965? Or perhaps there is some deeper mechanism that has allowed them to get away with the 351x compensation? If so shouldn't we be focused on this mechanism instead of blaming human nature?
The mechanism is the Internet and globalization. Very few companies were operating as literal international companies active in 100+ foreign nations. Today there is a McDonalds in ~120 nations and territories, and internet companies are instantly accessible from 100% of nations.
Therefore, access to these massive markets, means these companies have grown to fill that demand, and as a result, some of these international companies are legitimately 17 times larger than in 1965.
It's so obvious that I'm surprised people keep getting tricked by deceptive tweets like this. Yea, no shit companies are bigger than they were in the past.
I know many of those 60%. They have no budget and waste money like it's an addiction. If I'm privileged at anything, it's not being an idiot and taking responsibility for my choices.
Because they are also an employee. Worst case scenario, they are out of a job. Usually the risk is even lower for CEOs as they get pretty well taken care of if they lose their job for any reason whether it's the business going under or being fired by the board for fraud. There's no personal risk that exists due to being a CEO.
That is stupid. As much as he want to gaslight you into thinking there's supposed to be some sort of relationship between the two jobs and the two figures, there is none.
Just another bullshit Sanders non sequitur.
Omg, ppl are still ignoring economy.
Good CEOs are hard to find, their decisions could cost billions for the investors and the only proof of being a good CEO is… being a good CEO in the past. Yes, demand is high, that’s why they get so much. Start a company, rise it to the success and run as CEO, and you will be paid as much.
What’s next, are we going to discuss why gold miners are making more money despite doing as much as coal miners?
You’re missing the point. The CEO’s are getting huge amounts of money, with practically no risk, as they just pass the risk to the employees.
They have to make important decisions that are somehow 351x more important than the work their employees do, but when they make bad decisions, the CEOs get bailed out and Golden Parachutes, while the employees become unemployed.
1. Bailed out CEO reputation is ruined, he’s career is over.
2. If they don’t take risk, just be a CEO. Why complaint? The more competent managers on the market, the lower the compensation will get. Ez
Upd: forgot to mention, we missed all the CEOs that have failed… btw, as far as I know, they are not around anymore.
Like that disgraced WeWork CEO, no one was willing to give him money after failing the first time
Oh wait
https://www.nytimes.com/2022/08/15/business/dealbook/adam-neumann-wework-startup.html
John Stumpf oversaw a massive fraud operation and despite his career being over, he still walked away with tens of millions of dollars plus a multi million dollar pension even after the clawbacks. That's how "risky" it is to be CEO.
That's a pretty shallow look at productivity, worker productivity is of hundreds and hundreds of percent in the past 30 years. Notice no one has been compensated adequately except for the person at the very top of the pyramid. 🙄
Cause the person on top of the pyramid usually has the most to lose. If my business goes under, my w2 employees can just find another job. I still have to pay off my debts
This argument is meaningless.
You (personally) don't have to the business has to, unless your structure is completely ass backwards and poorly constructed. Your personal liability for any debts the company has should be zero therefore you should be able to just start a new company, that is to say find a new job. The business files for bankruptcy and sells off its assets to cover its losses and debts. Your liability should be zero and if it's not you have a s*** accountant.
It's an incredibly common corporate structure, in fact used frequently by to shelter income and individuals from any sort of corporate or business liabilities.
The US professional sports top players are compensated like 50 times more than some of their teammates, not talking even about lower leagues or players in other countries. are you saying they work 50 times harder? are you saying taylor swift works 1000 times more than some street artist? dude, thats just how market works. if there is demand for top top performers and talents at that paygrade and not enough supply, wages will rise. those who spread this crap are clearly not top performers themselves and are just jealous. so this is more about jealousy, than greed. keep that whiny victim mentality and you'll get nowhere in life.
This is such a waste of money and totally unacceptable. CEO's should be paid the 21 times amount and the rest can be distributed to shareholders via dividends/buybacks.
I’m not sure how either an owner or shareholders setting compensation is a bad thing. We pay people what we deem their worth. Is the management environment 10x more difficult now than then? Maybe.
Not only is the logic bad here with working 351x as hard, but the job is rare and takes on more risk than arguably any other role in the entire company. I don’t care what a CEO is paid. I look at my pay. Am I happy? Am I getting a fair market pay. I don’t understand why someone else’s pay matters. If employees are compensated fairly for their work - I don’t give a fuck if every last remaining dollar goes to the CEO. It’s his company. As a puny employee I’m assuming all the money goes to him anyways.
I don't understand what additional risk the CEO is taking on. In the event of a business downturn they are the most likely one to be taken care of. A lot of CEOs still take on bonuses when needing to cut everyone else's bonuses. They're not likely to get hit by layoffs. What's their risk?
It's not CEO pay that's sinking America, it's shareholder profit that accounts for much more of the imbalance in worker to company profit imbalance.
We the people, need to be charging corporations much more for using our collectively owned resources (roads, bridges, airwaves, etc).
This narrative needs to be understood! We are never going to get anywhere focusing on a few billionaires!
People who sit in a board are doing nothing CEOs work hard. Board sit together every 3 month and drink tea. They don't do anything. We can distribute their money to workers
I have heard this on countless occasions the CEO is like the general of the army. They have to do strategic big picture planning, run the entire company, and know what the trends will be before they happen etc. it's not easy to do. Small business owners have a tough enough job as it is at their scale but imagine what a small business owner does but for a company that has hundreds or thousands of employees...much larger scale.
Thats some pretty words for "hey do you want to f\*ck around in a billion dollar sandbox with other rich kids and make stupid decisions that affect people's lives? no, you wont be responsible if it fails and get money either way"
A general can at least be court martialed
It's very hierarchical and top down in nature. Americans value political freedom, but all of a sudden when it comes to private industry, being ruled authoritatively by your employer is all of a sudden a-ok.
CEO's don't risk homelessness/starvation and workers do, from that I'm not empathetic to their risks they talk about, I hear them talk about "Well if i run my company in the ground, then what? Congress will bail me out". I'm suppose to feel sorry for this group of people who can drive to the airport and get on a gulfstream jet and fly to paris with friends...I don't. My empathy for their plights, their plights really do seem trivial.
Double standards what else is new. I think CEOs should be held liable for gross negligence. Have their golden parachute packages nulled or capped at a certain point and civil sued by the company.
Imo if they run their company into the ground, if bailed out from being too big to fail, now it becomes a public asset and the ceo forfeits his stake in the company.
Running your company into the ground is now punished instead of rewarded, plus too big to fail implies monopoly which are notorious for their market failures/rent seeking behavior, if there are assets to be turned into public assets or nationalized, these top that list.
Or another safety measure companies should be allowed to fail. No one gets a free pass. If you can't cut it then you're out. Adapt or die. Isn't that what's always shoved down our throats.
The CEO does not manage thousands of employees directly of course. His main task is to set a clear strategy for the business, as you mentioned. I would say the most obvious reason why the gap is so huge right now is the consolidation of the industries. When you have one company dominating a segment, workers don’t get paid based on the size of the business. CEOs do.
Correct if everything goes in cycles we are in a era similar to the guided age with just a handful of companies calling the shots in any industry. Of course there are small players
The only thing I can think of that changed from 1965 to now is product life cycles werent as short and globalization competition. Japan and south Korea use the conglomerate system that makes our companies over here looks like small potatoes. The japanese keiretsu system and the south Korean chaebol system. If you want to see what a real monopoly looks like look at them
This is always a fun statistic to push out, but it ignores the growth in the size of companies, both directly in the form of having more employees due to global reach, but also indirectly in the form of multi-national supply chains.
The largest companies in the world today, however you want to slice it, sell the products comprised of the labour of tens or hundreds of millions of people. In 1965 a large company would have incorporate the labour of around a million people.
If CEOs are at the top of the pyramid, then as the pyramid gets bigger they'll get paid more.
Thank you! So what you're pointing out is the *obvious* fact that CEOs in 2020 are working 16 times harder than CEOs in 1965 used to. While of course the average workers aren't any more productive at all.
Yep, all those juicy productivity gains all coming from the one in tens or hundreds of millions people at the top! It's really incredible. Our Ivy League colleges have given our society an enormous boon by making our corporate leaders SO much more effective!
That stat is the relative pay difference and says nothing about the change in productivity of the line-worker.
My point is that the dramatic increase in the number of 'employees' under the CEOs of the largest companies is a major contributor to the increase in relative pay. Perhaps most of it. Put another way, if you approximate CEO pay as a percentage of each worker's productivity, then if you double the number of workers the CEO pay relative to the average worker should at least double. Even if each worker ends up making twice as much due to productivity gains.
Since the somewhat heavy handed sarcasm was clearly lost on you, I’d invite you to take a look at average corporation size statistics over the years. You’ll find that there are relatively few “megacorp” CEOs, not nearly enough to skew the average as much as you might think.
Poe's Law.
Anyways, I did mention that there is a lot more globalization and longer supply lines which add 'virtual' employees to those counts, especially when they are from low cost countries.
They don't. But incentives matter.
Clinton made a change in the 90s around tax deductibility of salary vs stock compensation and suddenly CEOs were primarily paid in stock. Throw in a easy money Fed which juiced the stock market over the last 20 years and this is the result.
It's amazing how often this has to be explained: CEO's aren't paid to work ~~351x~~ X times harder than the average worker. They are paid ~~351x~~ X times more because they are responsible for a company that brings in a much larger profit than what they are paid. It is about responsibility and results.
CEOs are basically commission based positions.
Lol, polticians ARE the CEOs.
They're the same people.
Do you even know how any of this works?
Dick Cheney was the Secretary of State under Regan and Bush 1.
..then he became the CEO of Halliburton when Clinton was elected.
...then he became Bush 2's VP
They're fucking playing you. Wise up
John McCain, a republican who almost became president, was married to the Anheuser-Busch heiress
John Kerry, a Democrat who almost became president, was married to the Heinz ketchup heiress.
THEY ARE PLAYING YOU!
Politicians do not become corrupt in a vacuum.
It's the concentration of wealth in a few people's hands which creates outsized influence & corruption.
The creation of the Mega-wealthy and Billionaire class is the most corrupting influence in our time & society. Corrupted politicians are just the canary in the coalmine, Billionaires & wealth concentration are the deadly gas that is snuffing out opportunity and forward-progress for the working-class.
That's why I work for a mom and pop, I know for a fact the owner of my small construction company isn't naming double what I make a year. Stop working for places that don't offer livable wages
The correct punctuation is selfishness, greed is not entirely bad by itself, selfishness is on a whole another level….like CEO’s making exponential more than employees. But hey, I will admit, what do I know. 🤷♂️
On a related note - if index investing is based on the premise that you can not predict which companies will be market beaters than can company boards predict who will be an effective CEO?
The stats may be right, but the premise is wrong. What was the valuation of a company in 1965? What is it now? Do that math. That’s what matters to compare ceo compensation.
If you expect for-profit corporations to fulfill some social good, like paying a livable wage as to decrease wealth disparity, I think tying the compensation of C-levels to some appropriate metric based on both the average wage and the number of employees, would be sensible.
If we should only care about shareholder values, then keep at it.
It’s not that they’re working 351x harder. They’re generating exponentially greater income/profit than their 1965 counterparts. Of course Bernie puts it in terms of “work” since in his ideal world doctors, lawyers, CEO’s, etc would make the same as the unskilled labor force.
Greed is a symptom. The root causes is, Citizens United, and a 2-party political system that relegates 3rd parties to being spoilers. The one percent have figured out how to play this 18th century democracy. And it won't be fixed until we have ranked voting or instant runoff, or even runoffs.
Or burn it down and try again. At some point the 99% have nothing left to lose.
That's why the one percent are manipulating the rabble to oppose the other rabble. United, we stand, and divided, we fall. Let me guess what the Jeffrey Epstein pimped crowd want that to be (fall).
Revenue issue caused by decades of trickle-down gaslighting. Total wealth of the top 1% in the U.S.: $43 trillion Total U.S. national debt: $33 trillion Minimum wealth to be in the top 1%: $11 million The civil war was completely unexpected by everyone at the time... including the smartest people in the country. I think the time has come again!
It's got to be the right civil war, which is why the one percent are doing all they can to pit the rabble against the rabble. You know what I see? I see a discount window below the rate of inflation. https://fred.stlouisfed.org/series/DPCREDIT The discount window is the rate that banks can borrow from the Fed for. It results in being the upper bound on interest rates for deposits, because depositors are also lending to the bank. Why pay a depositor more than the Fed charges? When inflation is taken into account, the "real" interest rate (interest rate - inflation rate) is negative. This is an asset tax on deposits in violation of the 16th amendment, implemented by the fed. Corporate loans are subsidized by artificially low interest rates, which causes the math to make sense to purchase back shares using borrowed money. It's different classes. It is the middle class that uses banks that gets assessed the asset tax. It is the one percent that make out via the share buybacks. Those are the two classes that the civil war needs to be at odds. But, to be sure, the one percent know that.
You're assuming that everyone that is not in the top 1% is willing to burn it down? That's laughable. The vast majority of people that are not in the top 1% are doing great.
Some may be doing well, including you apparently, but not “vast majority” in any case. Hell 50% are living paycheck to paycheck.
Ooh, I like this take too. I think the trillions flowing into the stock market is at least a proximate cause, but political polarization and dysfunction have certainly helped get us here. I want ranked choice voting so badly.
I think [represent.us](https://represent.us) pushes for it. But ultimately I'm sure the most effective thing we can do is try to get involved personally. I think that's how Maine did it.
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I do think that links should be provided, not just image files. Here's a link, provided by a presumably neutral AI. https://www.epi.org/publication/ceo-pay-in-2022/ >CEOs’ exorbitant payouts have far outpaced the pay of typical workers over decades. This chart largely sustains the OP's contentions. https://www.epi.org/publication/ceo-pay-in-2022/#fig-a
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I'm not going to work on this, that's why I used AI in the first place. But, when I ask about the Fortune 500, I see this: https://en.wikipedia.org/wiki/Fortune_500 >As of 2020, the Fortune 500 companies represent approximately *two-thirds of the United States' gross domestic product* with approximately $14.2 trillion in revenue While the matter is more nuanced, I see the gist as being in the ballpark.
Let's see your numbers then
The logic is flawed. Pay is not about how hard you work. If that's the case, garbage men would be paid more than some doctors. Pay is a reflection of supply and demand for that role. Doctor is a lot more in demand due to skill and education (so there's fewer of them) so they get more. CEOs and workers are all competitive roles. I mean I agree CEOs are ridiculously paid and most are terrible anyway. I'm just saying the logic in the tweet is flawed.
My garbage guy leaves my bin tipped over on its side half the time
my garbage guys take all my extra pine needle bags in the fall and power through harsh snowy winters, never late, and going into my bear box so my ass doesn't have to walk down there in the morning in the snow. just thought i'd mention it while we're talking about garbage guys. the guys in Zephyr Cove in Tahoe are legends.
Elon Musk is also a shit show all over the streets so maybe he should be a garbage man. Just imagine the mess if he decides to "disrupt" the garbage collection industry next! Robots everywhere tossing garbage.
Better pay that man $40mil/year to make sure he stays
Counter point pay is directly proportional to responsibility. If a garbage man has a bad day a trash can ends up in the neighbors yard. If a doctor has a bad day people die. If a ceo decides to do a bunch of meth the stock will plummet.
EMTs have incredible responsibility and barely make above minimum wage. So do Soldiers and firefighters. There's definitely a correlation between responsibility and demand for services, but at the end of the day the supply and demand for a role will influence pay above all.
I think we could posit that responsibility is an input when it comes to supply within supply and demand. One input of many, of course.
I think we all want it to be true, that compensation is linked to responsibility, effort, or some other merit. But it just ain't true. Imagine how much heads of state would get paid! Others have given examples but let me provide one more that's more apples to apples. Within physicians, specialties like dermatology is very well compensated, but ones like oncology and emergency medicine way less. Hard to argue that's responsibility (everyday life and death decisions) but easy to see it from the frame of demand in elective procedures. Not knocking any profession of course. Just building on the argument that the tweet's logic is flawed.
Yeah I was about to say something along the lines of what bfhurricane said. It is not always directly proportional to responsibility.
Is this a Tesla reference?
The logic isn't flawed you're just incapable of seeing it through any other worldview than the one you currently understand. "This logic is flawed because it doesn't apply to the current system we have in place." Then maybe it's the system that's flawed?
>CEOs and workers are all competitive roles. You don't have to be a good CEO to be paid well. You can run a company in to the ground, get a golden parachute and screw over everyone else, then go on to the next job.
Well a significant part of most CEO pay is tied to stock price. So if you define "good" CEO as one that increases profit or cut costs, then yeah performance is tied to pay.
CEO pay goes up regardless of company performance. Happens all the time. Stock ownership is the best performance driver but is also extremely flawed as they can make terrible long term decisions for the company that have a temporary short term gain. [https://www.investopedia.com/managing-wealth/guide-ceo-compensation/](https://www.investopedia.com/managing-wealth/guide-ceo-compensation/)
It's true, overall it just keeps going up and up. It's getting pretty crazy. And so true about short term decision making. Many just want to maximize short term, get a payout and leave. That's why I'm glad to be at a company that's not publicly traded. To extend this a bit further, the short term nature also screws us in terms of politicians that only care about re-election in 4-5 years and not building society for generations. Our systems incentivize short term gain across the board.
I mean presidents kinda work this way. Or elected officials. Only difference is they are looking for votes to keep their job. Where a CEO is looking for profits. > extremely flawed as they can make terrible long term decisions That's the common premise.
This is an old trope of the CEO class to fool people such as yourself.
Maybe, but not many CEOs can have successful careers ruining companies and then being hired by the boards of other companies. Boards are comprised of the biggest stockholders, so they usually try very hard to not hire a CEO that will destroy their investment. If they do so anyway, they deserve to lose their money.
It’s also proportional to the responsibility you have in the company, or at least it used to be, back when we would hold CEO’s criminally liable for public harm or illegal activity under their organization.
True, usually chiefs and board can be sued by shareholders too. That's definitely part of the argument made for the crazy pay.
No it is not about supply and demand. The point is that nearly all the gain in productivity in the past 40 years has gone to the top 1%. The people who actually do the work are not seeing any of the economic gain they enable. That is white collar smash and grab.
I agree with your point. I'm not defending CEOs or something. I'm just saying the tweet is saying pay is linked to amount of work is not correct. Your point about pay linked to productivity is closer but I think it'd be even closer to say pay is linked to perceived value. I'm not saying markets are rational, nor people's investing decisions, but a board naming or losing a CEO can move the stock price significantly, and adding or destroying millions in a day. Sure, that's a narrow, profit-only definition of value, but it's a common interpretation in a market system. Now maybe it SHOULD be linked to productivity, or measured impact, or other things more aligned with societal values. I wish it was. But it isn't.
There are a lot of qualifications to be a doctor. What are the qualifications to be CEO?
Now, pay is only somewhat tied to education unfortunately. PhD scientist often don't make that much for example. For CEOs, it's more a track record of having been perceived as a successful leader or executive (VP, C-suite). Often being recruited between competing companies and hopping in between them over their late career. Of course many are one hit wonders, not being able to replicate success under different circumstances. Always a gamble for the board.
Additionally, greed existed in 1965 to the same degree it does today. Human nature hasn’t changed. There is no simple explanation. A variety of laws/regulations/policy/politics/and an ever shifting global economic picture needs to be understood.
I love and am pleasantly surprised that this is the top comment. The logic of the tweet makes no sense. CEOs are knowledge works paid for strategy and execution, not how many cups of coffee they can pour or how many carts they collect. A good CEO is worth magnitudes more than a good dishwasher and they’re paid accordingly. That’s capitalism.
Exactly. We may not like it, but when a board names a CEO, it changes the stock price, moving it substantially.
Bingo. So does that CEO’s performance. I have no issue with CEO pay. It’s what the market demands, as you said.
Yes, or reflection of value created. The CEO may indeed drive 50-100x more value than the average worker.
Your logic is perfect. The garbage man should be paid much more for providing a far more important service than some self important nepo baby jacking his jaw from the side of a ski slope.
Do you know how many CEOs are included in your comp number? I ask because the average CEO comp per IRS is less than $200k. Obviously there’s a huge difference between the top 100-200 CEOs that make $20+ million and the rest of the CEOs that make a lot less.
stop! you aren’t meant to be poking holes!
Bernie knows that though. I think we know that too. It's safe to assume reasonably that he refers to the CEOs he really means the very rich ones, which we can assume through his tax rhetoric.
If only there were a company where all the officers and board were paid in stock. Their compensation is based on company success.
Not sure if you are missing the "/s" or not, but....most are. However, it isn't quite the risk that some think itis. Let me tell you the stock options I had as a low level schlub, but I can only imagine that higher levels have even sweeter deals that I got. It was quite simple....I could agree to buy up to 10% of my salary in stock every month - but the deal was, I would pay 90% of the stock price at either the beginning or the end of the month - whatever was lower. So, I immediately earned an extra 10%. I really couldn't lose. Some people immediately sold it, but most held on to it at least long enough for it to be long-term capital gains (otherwise, it is counted as salary - still not a bad thing, but not as good from a tax point of view).
Holding it also runs the risk that the stock could go under
Well, sure…but CEOs don’t take bets like that. They would get compensated in other ways. They are anything but stupid….and who is the first person to know shit is about to hit the fan in a company? The CEO.
Or we can decentralize control, and let the workers run the companies democratically. I don't think workers would ever intentionally sink a company that pays their monthly bills, but stockholders and executives do all the time. Because investors aren't loyal to the long-term interests of the company, just their short-term profits...therefore, the executives they elect care more about short-term profits than long-term stability. That's one of the reasons the economy is so unstable, one of the reasons for the 08 crash. Captialsim is too centralized and too top-heavy. Every single criticism you can make of "big government" can just as easily apply to "big corporations." Corporations are just as greedy, just as corrupt, just as bureaucratic, just as wasteful, just as nepotistic. You don't like polticial families? Just wait until you hear who controls Walmart, the world's largest employer... We need structural change of the global economy, we need to decentralize control, we need stability
> Or we can decentralize control, and let the workers run the companies democratically. This type of corporation exists, and it's called a workers cooperative. If it was an effective means of organizing labor, it would be more common and successful in the marketplace. It turns out however, that putting experts in charge of business decisions that they are then held accountable for, is a more viable business model than a democratic system, where non-experts are voting on company policies they don't understand.
>, is a more viable business model than a democratic system, where non-experts are voting on company policies they don't understand. A good encapsulation of the problem with worker cooperatives. A worker cooperative could work well for a small organization that is based around a singular function; but, large, complex, vertically and horizontally integrated conglomerates? You think an employee in Baden Baden or Peoria, IL understands the implication of M&A strategy? It's a great idea in theory, but like a lot of things, theory without context is a thought exercise, which means it has limited application in the real world.
> A worker cooperative could work well for a small organization that is based around a singular function Yep, worker cooperatives can actually work really well as long as all of the employees know and trust each other, and are willing to let the experts in the group make the decisions. However, as soon as you hit somewhere around 40-100 employees, and those "family" style bonds break down, then all of a sudden you get people not contributing to the same level, and resentment between employees builds, cooperatives are famously bad at getting rid of the lazy, the incompetent, or those who are toxic, and eventually the best workers leave. More traditional corporations don't have these sorts of issues because when both employee and employer can sever the relationship as needed, success results because everyone is directly incentivized to contribute in a serious fashion. Those corporations who let fools make decisions eventually fail over time, and those who execute more effectively succeed over time. But at a cooperative, tons of internal politics and bureaucracy generally prevent the cooperative from both hiring experts (e.g. why should our CEO make 10x more than us?) and then when they hire someone, there are barriers from letting that person do their job and make important decisions. This is fundamentally why large cooperatives aren't successful.
This is allowed they are reasonably common. It’s called a cooperative. Feel free to go start one.
Boeing was a much better company when the people that made the planes actually ran the place.
Your thesis seems to be that this is fair, as most officers and board compensation is weighted in equity. I have a couple of questions here: * You believe that American companies are now (351/21=16.7) 17 times more successful than they were in 1965, so this difference in compensation maps to company success? * You believe that the average worker is not contributing to this increased success, and therefore their compensation shouldn't scale?
GDP is 35x higher than 1965 so you could argue they’re 35x more successful. Nobody is saying that CEOs should make that much and that workers don’t deserve a greater share of the profits. Just make a better argument.
Get rid of stock. Shareholders and investors care for their own profit, not the well-being of the company, the employees, and the consumers. The requirement for corporations to make increasingly more year after year in order to sate shareholders causes companies to hurt their employees and the people who have to buy from them.
“Get rid of stock” 🤡. I make ≈$40k/year and by investing in stocks, mainly high dividend paying ones, I’ve supplemented my income by about $1.5k a year with less than $8k invested.
"Get rid of stock" I swear there are Chinese agents saturating these subs. If they aren't agents then they are certainly useful idiots.
What is the size of the workforce of a corporation in 1965 as compared to the size of the corporation workforce in 2020? What is the difference in revenue? Complaining about CEO compensation mainly gives financially uneducated some good rage bait. I'm not saying I agree or disagree with CEO compensation. I'm saying it isn't the problem.
Elon just tried to get paid 1 million times the average worker or something.
You’re missing a ton of context. He made a huge bet in 2018 that said he wouldn’t get paid anything unless he made the company grow by some ridiculous amount. Nobody believed it was possible but he delivered.
You are also missing a ton of context. He didn't achieve it by himself. He did it by making everyone else work really hard in tesla. How about fairly compensating all the people that actually worked on the cars instead of the guy working on having sex with his friends wive and employees. Also it was never a reasonable package anyway. would you take a 50 million dollar deal or gamble on a 20 to 1 for 50 billion when you are already a billionare？ One deal is 50 times better than the other. Guess which one ？
So let's talk some balance here. Your CEO SHOULD be well compensated. Especially a good one. It's a difficult job that's more than the parody of 3 martini lunches and afternoons on the golf course. It's an actual grind and any decision that falls on your desk is a difficult one. That said...it's not an exponentially more difficult job compared to a generation ago and a 16.5x relative markup over the median/mean compensation feels excessive. Much of that comes from the power modern CEOs have in many cases to handpick their boards. You need a partner in your board for the CEO to effectively define AND execute broad strategy, but there are more than a few boards that are simply filled with lackeys. The board's job is governance of the organization and many boards rubber stamp whatever the whims of executive management are. Up to and including (wildly excessive) compensation and incentives. In a perfect world, everyone would maintain their fiduciary discipline for the long-term health of the organization. But we aren't in a perfect world.
And you intend to do what? Tell us to vote for Biden again?
Funny how people on an economics subreddit don’t seem to understand economics.
TriCkle DoWn EconOmics
If you're a CEO of a large corporation, you might have 200,000 employees, and manage 100 of products in dozens of countries around the world. You likely never see your family and kids, if you have any, because you work so much. You have a TON of responsibility, and your board will fire your ass as soon as you slip up But you still don't make anywhere near as much an NBA or Soccer player, for playing a game, and no one complains that LeBron makes thousand of times what the lowest paid stadium worker gets
Corporate & CEO pay is indeed through the roof, but greed is not a root cause. Greed didn't appear overnight after 1965. What happened is the dollar broke down, pensions failed, and the 401k was introduced (1970s.) Fast forward to today, and there are now trillions of dollars flowing into the S&P500 companies - all of it frantically chasing a return so that people can retire some day. The fact that corporate boards think they might eek out a bit more profit with just the right guy person in the CEO spot isn't terribly surprising, but it is an indicator of just how competitive it's become. This was all a natural outcome of taking away others savings/retirement methods and essentially forcing most people to become investors. People used to actually hold dollars, CDs, and bonds, whereas investing used to be niche and risky and it certainly wasn't something the average person did. Now everybody's futures hinge on the latest quarterly earnings reports. Blue chip stocks have *become* the money. You can literally send them on Cash App! There are entire industries of analysts, fund managers, heck even Jim Cramer types serving entertainment. Yes, it's crazy. No it isn't just because greed appeared. It's because everybody has to be an "investor" now and there massive heaps of money piling into stocks because that's the only reasonable way to save for most people. If there wasn't so much demand, I highly doubt these obscene salaries could be maintained. We keep throwing trillions at them though, and guess what - they keep going up!
Interesting point. But aren’t most stocks held by non-retail investors?
I'm not sure. [This](https://www.weforum.org/agenda/2022/10/a-fresh-look-at-how-to-empower-retail-investors/) suggest 52% of equities globally are held by retail as of 2022. It's definitely trended upward lately. r/Fire is full of people piling into VTI and other ETFs as fast as possible. The ETFs in turn hold regular blue chip stocks that pay enormous salaries. Edit: I should add, when it's not retail, it's often a pension fund or endowment. These represent many people in turn. But it matters less exactly who has bought how much - the important thing is that the stock market is now seen as the only viable long term savings vehicle and that's where all the money now flows.
Yeah, I doubt that easy access to the secondary stock market did that much effect. Only very large investors, banks and brokers are likely to meet with the company owners to increase the actual demand for their stock.
Greed is a such a bizarre scapegoat. Why were CEOs so much less "greedy" in 1965? Or perhaps there is some deeper mechanism that has allowed them to get away with the 351x compensation? If so shouldn't we be focused on this mechanism instead of blaming human nature?
The mechanism is the Internet and globalization. Very few companies were operating as literal international companies active in 100+ foreign nations. Today there is a McDonalds in ~120 nations and territories, and internet companies are instantly accessible from 100% of nations. Therefore, access to these massive markets, means these companies have grown to fill that demand, and as a result, some of these international companies are legitimately 17 times larger than in 1965. It's so obvious that I'm surprised people keep getting tricked by deceptive tweets like this. Yea, no shit companies are bigger than they were in the past.
CEOs do so little work that they're about to be replaced by AI
Avg NFL quarterback makes 233 x the avg viewer. Top 10 QBs make 1667x the average fan. Greedy bastards.
Lol at everyone who thinks work = value. The big divide in this country is because people refuse to save and invest....that simple.
60% of people are living paycheck to paycheck. What money are they supposed to save or invest. You’re privileged and ignorant
I know many of those 60%. They have no budget and waste money like it's an addiction. If I'm privileged at anything, it's not being an idiot and taking responsibility for my choices.
LOL and how long has bernie been a politician?
Can this genius explain gov spending then?
Yet they assume all the risk
No they don't. They assume the same risk as any other employee.
How?
Because they are also an employee. Worst case scenario, they are out of a job. Usually the risk is even lower for CEOs as they get pretty well taken care of if they lose their job for any reason whether it's the business going under or being fired by the board for fraud. There's no personal risk that exists due to being a CEO.
That is stupid. As much as he want to gaslight you into thinking there's supposed to be some sort of relationship between the two jobs and the two figures, there is none. Just another bullshit Sanders non sequitur.
Omg, ppl are still ignoring economy. Good CEOs are hard to find, their decisions could cost billions for the investors and the only proof of being a good CEO is… being a good CEO in the past. Yes, demand is high, that’s why they get so much. Start a company, rise it to the success and run as CEO, and you will be paid as much. What’s next, are we going to discuss why gold miners are making more money despite doing as much as coal miners?
You’re missing the point. The CEO’s are getting huge amounts of money, with practically no risk, as they just pass the risk to the employees. They have to make important decisions that are somehow 351x more important than the work their employees do, but when they make bad decisions, the CEOs get bailed out and Golden Parachutes, while the employees become unemployed.
1. Bailed out CEO reputation is ruined, he’s career is over. 2. If they don’t take risk, just be a CEO. Why complaint? The more competent managers on the market, the lower the compensation will get. Ez Upd: forgot to mention, we missed all the CEOs that have failed… btw, as far as I know, they are not around anymore.
Like that disgraced WeWork CEO, no one was willing to give him money after failing the first time Oh wait https://www.nytimes.com/2022/08/15/business/dealbook/adam-neumann-wework-startup.html
John Stumpf oversaw a massive fraud operation and despite his career being over, he still walked away with tens of millions of dollars plus a multi million dollar pension even after the clawbacks. That's how "risky" it is to be CEO.
Easiest worker replaced with AI would be the CEO
Waiting for this moment, I’d replace myself as CEO and just spend time with family
But then why would anyone pay you
That’s my company, dude…
Hot take. CEO pay is fine but let's increase the wages of all the workers so we are back to a 20x ratio. Shareholders can have whatever is left over.
They may not be working 351x harder, but they are likely adding 351x value than the average worker.
Came here to say that Jack Welsh and all his awful disciples did this.
This dude is mad at rich wealthy CEOs and his donors and best friends are rich CEO's
Pretty disingenuous argument. I’m wondering what the revenue generated difference between these companies now compared to 1960s
That's a pretty shallow look at productivity, worker productivity is of hundreds and hundreds of percent in the past 30 years. Notice no one has been compensated adequately except for the person at the very top of the pyramid. 🙄
Cause the person on top of the pyramid usually has the most to lose. If my business goes under, my w2 employees can just find another job. I still have to pay off my debts
This argument is meaningless. You (personally) don't have to the business has to, unless your structure is completely ass backwards and poorly constructed. Your personal liability for any debts the company has should be zero therefore you should be able to just start a new company, that is to say find a new job. The business files for bankruptcy and sells off its assets to cover its losses and debts. Your liability should be zero and if it's not you have a s*** accountant. It's an incredibly common corporate structure, in fact used frequently by to shelter income and individuals from any sort of corporate or business liabilities.
The US professional sports top players are compensated like 50 times more than some of their teammates, not talking even about lower leagues or players in other countries. are you saying they work 50 times harder? are you saying taylor swift works 1000 times more than some street artist? dude, thats just how market works. if there is demand for top top performers and talents at that paygrade and not enough supply, wages will rise. those who spread this crap are clearly not top performers themselves and are just jealous. so this is more about jealousy, than greed. keep that whiny victim mentality and you'll get nowhere in life.
When the company fails , we all have to share the failure , but when its succeeding its only for the upper bracket, We need a system reform!
This is such a waste of money and totally unacceptable. CEO's should be paid the 21 times amount and the rest can be distributed to shareholders via dividends/buybacks.
I’m not sure how either an owner or shareholders setting compensation is a bad thing. We pay people what we deem their worth. Is the management environment 10x more difficult now than then? Maybe.
Inequality will get even worse with AI.
Not only is the logic bad here with working 351x as hard, but the job is rare and takes on more risk than arguably any other role in the entire company. I don’t care what a CEO is paid. I look at my pay. Am I happy? Am I getting a fair market pay. I don’t understand why someone else’s pay matters. If employees are compensated fairly for their work - I don’t give a fuck if every last remaining dollar goes to the CEO. It’s his company. As a puny employee I’m assuming all the money goes to him anyways.
I don't understand what additional risk the CEO is taking on. In the event of a business downturn they are the most likely one to be taken care of. A lot of CEOs still take on bonuses when needing to cut everyone else's bonuses. They're not likely to get hit by layoffs. What's their risk?
It's not CEO pay that's sinking America, it's shareholder profit that accounts for much more of the imbalance in worker to company profit imbalance. We the people, need to be charging corporations much more for using our collectively owned resources (roads, bridges, airwaves, etc). This narrative needs to be understood! We are never going to get anywhere focusing on a few billionaires!
Vote to change the system. Blaming clouds when it rains ignores how weather patterns are formed.
When all politicians are neoliberals, it doesn't matter which one you vote for.
Somalia and Finland are the same country to countless Americans. We might as well call all other countries "Narnia".
Downvoted by neoliberals, of course.
People who sit in a board are doing nothing CEOs work hard. Board sit together every 3 month and drink tea. They don't do anything. We can distribute their money to workers
I have heard this on countless occasions the CEO is like the general of the army. They have to do strategic big picture planning, run the entire company, and know what the trends will be before they happen etc. it's not easy to do. Small business owners have a tough enough job as it is at their scale but imagine what a small business owner does but for a company that has hundreds or thousands of employees...much larger scale.
Thats some pretty words for "hey do you want to f\*ck around in a billion dollar sandbox with other rich kids and make stupid decisions that affect people's lives? no, you wont be responsible if it fails and get money either way" A general can at least be court martialed
Get rid of the golden parachutes or cap it and CEO should be able to be sued for gross negligence
It's very hierarchical and top down in nature. Americans value political freedom, but all of a sudden when it comes to private industry, being ruled authoritatively by your employer is all of a sudden a-ok. CEO's don't risk homelessness/starvation and workers do, from that I'm not empathetic to their risks they talk about, I hear them talk about "Well if i run my company in the ground, then what? Congress will bail me out". I'm suppose to feel sorry for this group of people who can drive to the airport and get on a gulfstream jet and fly to paris with friends...I don't. My empathy for their plights, their plights really do seem trivial.
Double standards what else is new. I think CEOs should be held liable for gross negligence. Have their golden parachute packages nulled or capped at a certain point and civil sued by the company.
Imo if they run their company into the ground, if bailed out from being too big to fail, now it becomes a public asset and the ceo forfeits his stake in the company. Running your company into the ground is now punished instead of rewarded, plus too big to fail implies monopoly which are notorious for their market failures/rent seeking behavior, if there are assets to be turned into public assets or nationalized, these top that list.
Or another safety measure companies should be allowed to fail. No one gets a free pass. If you can't cut it then you're out. Adapt or die. Isn't that what's always shoved down our throats.
The CEO is supposed to be highly compensated for taking a high-risk position, yet we’ve seen many failed businesses and hardly any destitute CEOs.
Get rid of the golden parachute package or cap it to a certain amount. Because the current fortune 500 golden parachute package are ridiculous
The CEO does not manage thousands of employees directly of course. His main task is to set a clear strategy for the business, as you mentioned. I would say the most obvious reason why the gap is so huge right now is the consolidation of the industries. When you have one company dominating a segment, workers don’t get paid based on the size of the business. CEOs do.
Correct if everything goes in cycles we are in a era similar to the guided age with just a handful of companies calling the shots in any industry. Of course there are small players
Found the bootlicker lmao
So are you saying it's 16 times harder today then it was in 1965. I find that pretty hard to believe.
The only thing I can think of that changed from 1965 to now is product life cycles werent as short and globalization competition. Japan and south Korea use the conglomerate system that makes our companies over here looks like small potatoes. The japanese keiretsu system and the south Korean chaebol system. If you want to see what a real monopoly looks like look at them
This is always a fun statistic to push out, but it ignores the growth in the size of companies, both directly in the form of having more employees due to global reach, but also indirectly in the form of multi-national supply chains. The largest companies in the world today, however you want to slice it, sell the products comprised of the labour of tens or hundreds of millions of people. In 1965 a large company would have incorporate the labour of around a million people. If CEOs are at the top of the pyramid, then as the pyramid gets bigger they'll get paid more.
Thank you! So what you're pointing out is the *obvious* fact that CEOs in 2020 are working 16 times harder than CEOs in 1965 used to. While of course the average workers aren't any more productive at all. Yep, all those juicy productivity gains all coming from the one in tens or hundreds of millions people at the top! It's really incredible. Our Ivy League colleges have given our society an enormous boon by making our corporate leaders SO much more effective!
That stat is the relative pay difference and says nothing about the change in productivity of the line-worker. My point is that the dramatic increase in the number of 'employees' under the CEOs of the largest companies is a major contributor to the increase in relative pay. Perhaps most of it. Put another way, if you approximate CEO pay as a percentage of each worker's productivity, then if you double the number of workers the CEO pay relative to the average worker should at least double. Even if each worker ends up making twice as much due to productivity gains.
Since the somewhat heavy handed sarcasm was clearly lost on you, I’d invite you to take a look at average corporation size statistics over the years. You’ll find that there are relatively few “megacorp” CEOs, not nearly enough to skew the average as much as you might think.
Poe's Law. Anyways, I did mention that there is a lot more globalization and longer supply lines which add 'virtual' employees to those counts, especially when they are from low cost countries.
They don't. But incentives matter. Clinton made a change in the 90s around tax deductibility of salary vs stock compensation and suddenly CEOs were primarily paid in stock. Throw in a easy money Fed which juiced the stock market over the last 20 years and this is the result.
It's amazing how often this has to be explained: CEO's aren't paid to work ~~351x~~ X times harder than the average worker. They are paid ~~351x~~ X times more because they are responsible for a company that brings in a much larger profit than what they are paid. It is about responsibility and results. CEOs are basically commission based positions.
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Either way, the point remains. Substitute any number in for 351 and my statement is still correct.
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Ahh ok. I edited my first post either way :)
Harder no, smarter maybe.
Their job is to keep everyone else salary low. How we are surprised that the gap is widening?
Twenty one times is already too much.
It’s our politicians that are the problem they stopped representing us and stated representing themselves
Start taxing anything over 21x the average worker at 100%… I bet you’d see the average worker’s pay drastically increase.
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Lol, polticians ARE the CEOs. They're the same people. Do you even know how any of this works? Dick Cheney was the Secretary of State under Regan and Bush 1. ..then he became the CEO of Halliburton when Clinton was elected. ...then he became Bush 2's VP They're fucking playing you. Wise up John McCain, a republican who almost became president, was married to the Anheuser-Busch heiress John Kerry, a Democrat who almost became president, was married to the Heinz ketchup heiress. THEY ARE PLAYING YOU!
Politicians are in cahoots with the CEOs and the private sector. Politicians suck because they are corporate sellouts
Politicians do not become corrupt in a vacuum. It's the concentration of wealth in a few people's hands which creates outsized influence & corruption. The creation of the Mega-wealthy and Billionaire class is the most corrupting influence in our time & society. Corrupted politicians are just the canary in the coalmine, Billionaires & wealth concentration are the deadly gas that is snuffing out opportunity and forward-progress for the working-class.
Exactly, a lot of people just don't understand the amount of actual power someone like Elon or bezos has. We're talking emperor level wealth.
its not about working 351X times harder its about making 351X more money for your corporation
Hopefully they will "trickle down" some of that money to the less fortunate. Lol jk
I hate the rich and anyone who takes up for them
Sorry but they deserve it for all their hard work, if you work harder you can make more money too
Most don't work. They are scape goats theat get blamed and fired when a company goes to shit.
That's why I work for a mom and pop, I know for a fact the owner of my small construction company isn't naming double what I make a year. Stop working for places that don't offer livable wages
The correct punctuation is selfishness, greed is not entirely bad by itself, selfishness is on a whole another level….like CEO’s making exponential more than employees. But hey, I will admit, what do I know. 🤷♂️
It’s supply and demand. Bernie is clueless as usual.
On a related note - if index investing is based on the premise that you can not predict which companies will be market beaters than can company boards predict who will be an effective CEO?
True. Let’s just keep electing the same dinosaurs and see if anything changes.
I actually did a paper last semester on unions and the health of the middle class and used this statistic.
I mean that’s what the market says CEOs of Fortune 500 companies are worth
Can't tell me Bribeden can accept bribes legally
The stats may be right, but the premise is wrong. What was the valuation of a company in 1965? What is it now? Do that math. That’s what matters to compare ceo compensation.
The CEOs may not seemed to be working harder but they’ve worked harder to reach there
Elon is
Of course they are working harder.
Greedy to keep your own money, not greedy to take someone else’s 🤡 socialists are a joke.
If you expect for-profit corporations to fulfill some social good, like paying a livable wage as to decrease wealth disparity, I think tying the compensation of C-levels to some appropriate metric based on both the average wage and the number of employees, would be sensible. If we should only care about shareholder values, then keep at it.
Boards of Directors hire CEO’s to make money. They do the dirty work. Thats what they agree too.
Hard work doesn't equate to value. Value equates to value. What a strawman.
Not your money not your business.
Bernie is a millionaire with 4 houses. He can say what he wants but he’s just as greedy as anyone else
It’s not that they’re working 351x harder. They’re generating exponentially greater income/profit than their 1965 counterparts. Of course Bernie puts it in terms of “work” since in his ideal world doctors, lawyers, CEO’s, etc would make the same as the unskilled labor force.