from the because-when-they-mess-up-they-only-have-a-golden-parachute...wait-a-minute dept.
Why are CEOs of U.S. firms paid 320 times as much as their workers?:
Last August, Jamelle Brown, a technician at Research Medical Center in Kansas City, Missouri, contracted Covid-19 while on the job sanitizing and sterilizing rooms in the facility's emergency department. Luckily, his case wasn't severe, and after having quarantined, he was back at work.
Upon his return, Brown was named Employee of the Month in his unit and given a gift voucher for use in the hospital cafeteria. The amount: $6.
"That stung me to the bone," said Brown, who makes $13.77 an hour and has worked for almost four years at the hospital, owned by the corporate giant HCA Healthcare. "It made me sit back and say, 'This place doesn't care for me.'"
Research Medical's owner, HCA Healthcare Inc., is a profitable, publicly traded network of 185 hospitals and 121 freestanding surgery centers in 20 states and England. Even in the year of Covid-19, 2020, the company generated $51.5 billion in revenue and increased its pretax earnings by 3.6 percent. Its shares are up by 14 percent this year, versus 10 percent on the Standard & Poor's 500 index.
That performance helped boost the total compensation HCA's chief executive, Samuel N. Hazen, received last year to $30.4 million, a 13 percent rise from 2019, documents show. Although Hazen's salary was 5.8 percent lower in 2020, the total worth of his compensation package equaled 556 times the compensation received by the median employee at HCA — $54,651.
The figures highlight the growing CEO pay gap, a problem among many public companies according to some investors and workers and even a few CEOs. In 2019, for example, the average pay ratio among 350 large American companies was 320-to-1, according to research by the Economic Policy Institute, a left-leaning think tank in Washington, D.C. In 1989, the average was 61-to-1.
(Score: 5, Insightful) by Azuma Hazuki on Monday April 12 2021, @09:07AM (10 children)
n/t
I am "that girl" your mother warned you about...
(Score: 5, Insightful) by Rosco P. Coltrane on Monday April 12 2021, @10:54AM (3 children)
The problem isn't that the US is a capitalist country, it's that it's a plutocracy.
(Score: 4, Insightful) by Azuma Hazuki on Monday April 12 2021, @11:48AM (2 children)
Like I said, our brand of capitalism is broken...
I am "that girl" your mother warned you about...
(Score: 3, Interesting) by Taxi Dudinous on Monday April 12 2021, @01:16PM
Well what do you expect? Even the most appealing "isms" are broken in short order once people get involved. The philosophy can be warm and fuzzy, while the reality grows darker with each moment. The best "ism" needs to be resistant to human corruption. But they all have holes in them that will be exploited eventually, or from the very beginning. This was foreseen after all
Thomas Jefferson
(Score: 2) by Mykl on Monday April 12 2021, @10:37PM
Agree.
Market Capitalism, in theory, results in all vendors/workers earning about the same - they have the same product/labour offer, same location/access to market, same cost, etc.
What the US has is a market which has been twisted and distorted by monied interests to not even remotely resemble a level playing field. This is a problem in all Western economies, but the US not only turned it up to 11, it kept twisting the volume knob until it snapped and spun around another full circle.
(Score: 2) by DannyB on Monday April 12 2021, @01:52PM (1 child)
I'm not against capitalism. What we have become is capitalism run amok.
The lower I set my standards the more accomplishments I have.
(Score: 0) by Anonymous Coward on Monday April 12 2021, @02:34PM
Capitalism is sorta ok. Predatory Capitalism, what we have, is not.
(Score: 2) by HiThere on Monday April 12 2021, @02:29PM (3 children)
It's not just capitalism. It's inherent in a structure where some people decide how much they're worth as well as how much those who work for them are worth. Even people who want to be fair will overrate their own contribution...and lots of people don't have being fair as their primary consideration. And part of "being fair" involves comparing how you are compensated with those who are doing similar jobs. Just about nobody compares the janitor with the CEO. And just about everyone says "I'm better than he is, so I deserve more". That's not capitalism, it happens in every hierarchical organization. And it tends to get worse as time passes, until the system breaks down.
Javascript is what you use to allow unknown third parties to run software you have no idea about on your computer.
(Score: 0) by Anonymous Coward on Monday April 12 2021, @08:36PM (2 children)
It is mere coincidence that the gap grows with time. The gap is growing because companies are growing. Split the big companies, and CEO pay goes down. Let then buy each other out, and CEO pay goes up.
I'm not saying I agree that high CEO pay is a problem. That idea smells of envy, jealously coveting what others have. I'll agree that the trend is of concern.
If you do think CEO pay is a problem, the solution should be damn obvious. Start by breaking up Apple, Facebook, Microsoft, Walmart, Amazon, Cargill, Citibank, Dupont, Cengage, Kraft, General Foods, Boeing, and so many others.
Oh, and don't cause the USA to fail in competition against non-USA megacorporations. Have a defense against other countries refusing to participate in breaking up huge businesses. If we can't get Samsung and TMSC broken apart, maybe we can't break apart Intel, and so on for all the rest.
(Score: 0) by Anonymous Coward on Monday April 12 2021, @08:50PM
Yes, this is the problem. Companies should not be allowed to merge if they have more than about 10% of their market. If they have more than about 20% of their market, they should be required to divide into at least two separate companies. Without competition, market economics does not work well enough.
(Score: 2) by legont on Monday April 12 2021, @09:55PM
The breaking is actually very easy to do. They prepared everything themselves.
After 2008 when many were close to bankruptcy, most companies divided themselves into dozens or hundreds of independent entities that have market kind of relationships between each other. One of the first one - many years before - was Fidelity where every mutual fund is a separate business that uses common infrastructure which is also a separate business. If the government simply dissolves Fidelity but leaves all the subsidiaries alone, nothing would happen or even noticed. There will be hundreds of new companies working with each other the same way as before, but without the CEO. They did it because they wanted to limit an exposure when a fund goes down.
Fast forwarding to now... Google? Just dissolve Alphabet and leave all their properties alone. Goldman and Morgan Stanley? Dozens of companies and a few banks. They are all now like this - ready for extermination. They paved their way to their grave.
"Wealth is the relentless enemy of understanding" - John Kenneth Galbraith.
(Score: 5, Informative) by VanessaE on Monday April 12 2021, @09:19AM
That is all.
(Score: 2, Insightful) by Anonymous Coward on Monday April 12 2021, @09:59AM (13 children)
In a healthy society, this would be answered with something like: is the person reliable, moral, gently, athletic or any other positive personal attribute.
In the U.S. however, this question is simply measured by how much something is ostensibly owning (debts don't count!). So you're worth more if you have a fancy BMW for wheels (owned by the bank), than if you drive around in an old car (paid for). I think the U.S. is a deeply sick society, and I wonder if it will ever heal.
(Score: 3, Insightful) by crafoo on Monday April 12 2021, @11:21AM (10 children)
No. Someone is worth by what they can provide, in real tangible assets, to other ground monkies. Look at how our females marry. They don't choose future divorces based on their gentleness or reliability. No, it's the bank account. It's human nature. Get mad and pout like a child all you want.
(Score: 2) by bart on Monday April 12 2021, @11:36AM
Yes, in the U.S. it seems to be the way you describe. Just proves my point.
(Score: 4, Funny) by Azuma Hazuki on Monday April 12 2021, @11:39AM
Are we speaking from experience? I can't *imagine* why someone might divorce you, with your general intelligence, cheerfulness, and good will towards others after all...
I am "that girl" your mother warned you about...
(Score: 2) by Eratosthenes on Monday April 12 2021, @11:40AM (3 children)
So they work 320X harder, and provide that much more value, right? Amazing.
(Score: 2) by crafoo on Tuesday April 13 2021, @12:33AM (2 children)
working hard != generate value
I mean, that's just basic economics. Also, value is subjective, aside from a tangible asset's intrinsic value (if any). Yes, a CEO can easily generate 320x the value of an assembly line worker. Or just as easily destroy 320x as much value. A large part of a CEO's job is dealing with risk and making critical decisions. Decisions, I might add, your average ground monkie isn't capable of making and achieving positive outcomes.
(Score: 2) by sonamchauhan on Tuesday April 13 2021, @01:18PM
> Decisions, I might add, your average ground monkie isn't capable of making and achieving positive outcomes.
Most people are capable of making rational business decisions. The average CEO is little different from your beloved 'ground monkies'.
(Score: 1) by khallow on Tuesday April 13 2021, @05:03PM
(Score: 0) by Anonymous Coward on Monday April 12 2021, @06:37PM
"our females"
Found out why you can't get laid. I was dirt poor, attractive but no knockout, still managed to find women that wanted to marry me because they cared about more than money. Best of luck with those stereotypes, you'll piss just about everyone off at some point if you keep using such broad characterizations.
(Score: 1) by fustakrakich on Monday April 12 2021, @07:25PM
It's animal nature wrapped in a human cortex
La politica e i criminali sono la stessa cosa..
(Score: 0) by Anonymous Coward on Monday April 12 2021, @08:58PM
>"Someone is worth by what they can provide, in real tangible assets, to other ground monkies."
The problem is that management, mostly higher management, can be compensated with stock options or grants. These come with tax advantages and tend to cost the shareholders less than the equivalent cash package. With this kind of compensation, management becomes focused on stock price at the expense of other measures such as fairness of pay, employee satisfaction, longer term economic benefit, etc. We need changes to the income tax structure as well as regulations to keep companies small enough that they cannot engage in monopolistic tactics.
(Score: 2) by crafoo on Tuesday April 13 2021, @12:30AM
Hey, at least I'm sparking some discussion. Keep your blood pressure meds at hand.
(Score: 1, Insightful) by Anonymous Coward on Tuesday April 13 2021, @04:05AM (1 child)
No, it's handled via tax policy. In most other developed countries there's a point where you effectively can't hoard any more wealth. And usually it's a combination of inheritance taxes and graduated tax rates that make it incredibly hard to become wealthy past a certain point in addition to better protections for workers.
The main reason it happens in the US is because our tax code allows it to happen. If there were taxes in place that made it effectively impossible to become a multibillionaire, you'd see those ratios come down rather quickly. The money being generated isn't going to workers and it isn't going to investments in production, it's going to make millionaires and billionaires. If we're not careful, it's even going to start making trillionaires in the foreseeable future. There's absolutely no reason why anybody should have a billion dollars, that amount of money is so mind bogglingly large that you're unlikely to be able to spend all of it in multiple lifetimes. Even spending 2% of it a year would require a mind blowing amount of spending and probably a bunch of wasted money to do. At that rate, you'd effectively always have an ungodly sum of money in your accounts and could spend like that for the rest of eternity if nothing steps in to stop it from continuing.
(Score: 0) by Anonymous Coward on Wednesday April 14 2021, @04:16AM
There is exactly one way that billionaires can meaningfully spend that much money: Major public works projects that are otherwise exclusively restricted to governments. The problem is that aside from Musk I can't think of a single billionaire in the world who is actually doing that. Even Bezos only gets a participation trophy because he isn't actually doing anything useful, just cargo-culting Elon to no effect.
(Score: 5, Interesting) by C0L0PH0N on Monday April 12 2021, @10:06AM (14 children)
Yikes!
(Score: 1, Interesting) by Anonymous Coward on Monday April 12 2021, @10:35AM (4 children)
FWIW at a hospital system like St. Jude's, one million dollars is actually considered to be low.
(Score: 1, Insightful) by Anonymous Coward on Monday April 12 2021, @01:14PM (3 children)
I would daresay those two CEO salaries are entirely in-line given underlings. ASPCA is 6-12x median salary and St. Jude's is 4x-16x between Doctors and Nurses (most likely). While they may seem high compared to regular employees, they do seem in line with pay for the stress and risk of CEO, unlike say Mozilla Foundation or Wikipedia, where the CEOs offer next to no value, and basically leech off volunteers or much lower paid employees who are first on the firing line rater than the CEOs taking a salary cut.
(Score: 0) by Anonymous Coward on Monday April 12 2021, @10:27PM
At many (most?) hospitals, clinics and healthcare systems, the CEO and administration aren't even the highest paid individuals there. It wasn't until you started seeing the conglomeration of healthcare providers that such changes in compensation started to become commonplace.
(Score: 0) by Anonymous Coward on Monday April 12 2021, @11:34PM (1 child)
the stress and risk of the CEO? lmao. what a joke. they're not *that* fucking smart and hard working. just shrewd in using their money and position to their advantage.
(Score: 0) by Anonymous Coward on Tuesday April 13 2021, @01:24AM
Exactly, there is a reason why there are so many stories throughout human history about rich people regretting their life choices and learning how to be better people. Pursuing money is fine, but someone's goal of being rich should not come at the cost of thousands of other people's suffering.
(Score: 2) by istartedi on Monday April 12 2021, @12:41PM (2 children)
United For Respect, the non-profit organization in TFA, has No data on Charity Navigator [charitynavigator.org], my go-to for this kind of thing.
We don't know if she's pulling a BLM or not.
Appended to the end of comments you post. Max: 120 chars.
(Score: 0) by Anonymous Coward on Monday April 12 2021, @09:05PM (1 child)
According to the 2018 990, the highest paid person makes $52,950.
(Score: 2) by istartedi on Tuesday April 13 2021, @03:45AM
Now that I know about 990 I was able to use the EIN 13-3885314 and did some more digging to get multiple years [propublica.org], including years prior when they were organized under a different name. Thanks for sending me down that rabbit-hole, but I haven't returned from Wonderland yet and may not. I don't get paid enough here to audit stuff (and I'm not a professional in that field).
Appended to the end of comments you post. Max: 120 chars.
(Score: 3, Touché) by hendrikboom on Monday April 12 2021, @12:46PM (1 child)
Do you really mean
?
It's probably true, but is it what you intended to say?
-- hendrik
(Score: 0) by Anonymous Coward on Wednesday April 14 2021, @01:21AM
You get a touche because you wouldn't believe how many times I had to read both before I realized what you were talking about.
(Score: 4, Insightful) by canopic jug on Monday April 12 2021, @01:24PM (1 child)
The CEO of Mozilla [soylentnews.org], which gets nearly all of its money in handouts from Google, gets compensated over $3,000,000 per year apparently. All the while Firefox is losing market share, double for Thunderbird.
Money is not free speech. Elections should not be auctions.
(Score: 1, Informative) by Anonymous Coward on Monday April 12 2021, @01:56PM
That's pauper-pay compared to Marxists [redstate.com]
(Score: 1) by fustakrakich on Monday April 12 2021, @07:28PM
Gotta kill the 501(c). It will solve a whole bunch of problems.
La politica e i criminali sono la stessa cosa..
(Score: 0) by Anonymous Coward on Monday April 12 2021, @11:39PM
this is what i do. the one wally world was pushing ~10 years ago was paying their Suited Whore $500k a yr. These CEOs are career upper management and are already very wealthy when they take these "non profit" jobs. If they had a shred of decency they would do it for free for a couple years, pas it off to the next one and start a trend. Your mansion mortgage and your kids ivy league school shouldn't be on the charity's back, you shameless, greedy fucks.
(Score: 5, Insightful) by Anonymous Coward on Monday April 12 2021, @10:41AM (1 child)
But seems in too many cases nothing happens.
(Score: 0) by Anonymous Coward on Tuesday April 13 2021, @06:32AM
FTFY.
(Score: 4, Insightful) by Rosco P. Coltrane on Monday April 12 2021, @10:51AM (15 children)
Do CEOs (or other power critters) have skills that are so rare and so essential that they're worth paying that much? Or said another way, does the company fare better overall despite the financial burden of the CEO's salary than without it?
Of course not. Yes, good CEOs are hard to come by and are in high demand. But they're not 300x to 500x more valuable than the low-level grunts. What we're seeing here is the rich class getting richer, and it's nothing new. Many studies indicate it was the major cause of the Roman empire's downfall for instance.
(Score: 1, Funny) by Anonymous Coward on Monday April 12 2021, @11:27AM (3 children)
I think I understand your sentiment. however, poor people in the time of the roman empire were much poorer than poor people today: they were literally slaves, who had no control over their own lives.
in fact, poor people today have better food and healthcare than rich people from the roman empire. they also have better access to education, entertainment, and their lives are safer. plus a number of various improvements.
would you give up your computer and phone for the life of a rich roman? ok, fucking the young slaves may be fun for a while, if you're into punishment-free rape, but I personally find the prospect of dying from a cut getting infected absurd. by the way, they didn't have viagra back then, either.
(Score: 4, Funny) by pe1rxq on Monday April 12 2021, @05:47PM (1 child)
So we are supposed to be ok with it because slaves a few thousend years ago had it worse?
You set a pretty low bar....
(Score: 1, Interesting) by Anonymous Coward on Tuesday April 13 2021, @05:53AM
yes. you are supposed to recognize that the word "poor" today refers to people who are richer than the rich of even a couple of hundred years ago. I have to work for a living. and yet, I got to travel the world, I have read hundreds of books before my 40th birthday, I have two healthy kids that my wife and I chose to have (and my son didn't lose his arm when a finger cut got infected). and a number of other things, I'm not going to list them all.
apparently it's true that in the US there has been a recent increase of inequality. but that shouldn't be a problem in itself. the thing to strive for is raising the standard of living of the poor.
one "solution" would be to take from the salary of the CEOs and give to the salaries of everyone else, which is what this article seems to be about. ok. that's an opinion. but the original poster of this thread was arguing that the current state of affairs is similar to Roman times, in particular to the decay of the Roman empire. I wanted to point out that things were worse in Roman times for the poor and the rich alike.
(Score: 0) by Anonymous Coward on Monday April 12 2021, @11:41PM
Mixing slaves up with the White citizens of Rome is dumb, and what did Rome in as well.
(Score: 2) by crafoo on Monday April 12 2021, @11:31AM (5 children)
This is a good question. Of course, the _only_ factor that matters when determining someone's pay is how difficult is it to find their replacement? Pay is simply a measure of how many other people are in the market for your job. Supply of your skills vs. demand for your skills. Not how hard you work, or how difficult the work is, or how special it makes you feel, or how necessary and vital your work is. If being a doctor were easy and everyone just loved doing it, we would pay them dogshit.
I think many skills required for a CEO's job are artificially limited to select clubs. I believe it is a quite difficult job, and has more to do with showmanship than most people acknowledge (or are capable of).
(Score: 1, Informative) by Anonymous Coward on Monday April 12 2021, @12:05PM
It's always funny how you talk about 'skills' while the reality has nothing to do with the skills.
CEO is just another version of a sales manager. If these managers delegate badly, you end up with a shit company very quickly. They sell the company to investors, btw, and guide product development and priorities. But it doesn't take some extraordinary person to do this.
(Score: 2) by sjames on Monday April 12 2021, @03:56PM (3 children)
There's a whole world full of CEOs used to working for a fraction of what American CEOs make, why not hire them?
(Score: 5, Insightful) by Anonymous Coward on Monday April 12 2021, @06:37PM (2 children)
Because they're not in the club.
There's an entire social strata in the U.S. that consist of what are usually loosely referred to as 'the elite'. These are the old money, trust fund families, whose kids go to the private schools none of us schlubs have even heard of, the ones who get into Harvard and Yale as a matter of course. Occasionally some up-and-comer who makes billions via some tech firm are permitted entry, to keep the money and power amongst the elite, but for the most part if you ain't born into it, you ain't getting in.
This is where the CEOs come from. They sit atop their firms and extract money, and sit on the boards of other companies and help those firms' CEOs extract money. If someone makes an oopsie at one firm, they shuffle the chairs around for a while and make sure the one who hath transgressed is taken care of. Sure, there aren't enough spots for everyone to be a C-level exec at a company -- that's what politics is for. The ones going into politics help the ones in the companies retain economic control, while the companies help the politicians retain political control. Administrations change and one set of club members take over while the other set cools their heels in a C-level spot, or one of those think tanks that exist to keep money flowing to them while they await another shuffle of the chairs.
Yes, yes, of course there are a few "outsiders" given the top spots at some of the high-profile companies for a few years. You know their names. That's why they're there, for you to know their names, and thus think that the system is as advertised and if you only work hard enough and long enough, you too can climb that ladder.
The actions of these CEOs and the rest of the elites, are far better understood if you assume that they have little desire for more money. They've already got money, any more money for them is just like one of us running up the score against our buddies in the bowling league. They are colluding with each other to maintain their control. As long as they have control, they'll never need to worry about money. That's why so many companies are appearing to behave in a manner inconsistent with the idea that companies exist to make money, and will act in ways as to make more money. No, the people in control of the company have other goals, and the company is merely a tool to use for those goals.
(Score: 0) by Anonymous Coward on Monday April 12 2021, @11:44PM (1 child)
this guy gets it.
(Score: 2) by edinlinux on Tuesday April 13 2021, @03:22AM
+5 to the above..
It is exactly like this..I have been there and seen it first hand..
(Score: 0) by Anonymous Coward on Monday April 12 2021, @03:39PM
Just for fun, I like to calculate the hourly rate that these CEOs are "earning". So, suppose that a CEO "earns" 1 million dollars per year. Just for simplicity, let us suppose that this hypothetical CEO is working 365 days a year (no days off), 16 hours per day (the guy is a hard worker!). What would his hourly wage then be?
$1,000,000/365/16 = $171.23/hr
Can any of you think of anything you might do for a job that would be worth that kind of dough? Could you even imagine demanding from the boss that kind of compensation? About the only thing I can think of that would be worth that kind of money is disarming bombs. (And I'm pretty sure that the guys who do that line of work earn substantially less than $171 per hour.) I'm also quite sure that CEOs are much easier to come by than you apparently suppose. I'm not going to bother to look it up again but I seem to recall that CEO pay is, in some cases at least, inversely correlated with the bottom line performance of the company.
The root cause is that the CEOs get to decide how much they get paid. C'mon! Be honest: you would certainly at least double or triple your compensation if it was your call to decide, wouldn't you?
(Score: 1) by khallow on Monday April 12 2021, @03:52PM
Depends on the size of the business. But yes, a good CEO can be much more valuable than several hundred low-level grunts.
(Score: 0) by Anonymous Coward on Tuesday April 13 2021, @04:11AM
It's mostly a byproduct of changes to the tax code. If the top tax tiers were where they were 40 years ago, you likely wouldn't see that much increase in pay as there'd be little point to it as most of the extra past a certain point would have to be paid back as taxes to the government. When Reagan took office, the top personal income tax rate was over 70% which made having a salary past a certain point pointless.
The other issue is that these scammers sit on each other's boards and since nobody wants to admit that their CEO is below average, they all get paid above average which causes an increase over time as half the CEOs have to be paid less for it to be an average of that sort.
(Score: 1) by khallow on Tuesday April 13 2021, @09:57AM
Many studies would be in error then. There are several effects being ignored in this blaming of wealth inequality: first, that the Roman empire was in no way a democracy - there was no representation of plebeian interests; second, that people were progressively tied down and enslaved as the empire wore on - feudal systems started to take root as the empire failed to protect its citizens from invasions and crime (something the wealthy were more able to resist); and three, the whole empire grew more and more corrupt and incompetent at providing necessary services. Notice how overlapping these modes of failure are. Much wealth was tied to land, and as the system grew more corrupt and oriented towards the wealthy (since no representation by normal people), it became harder for small groups to protect themselves. Hence, the feudalism started with people getting protection in exchange for part of their production. The wealthy were one of the groups able to offer such protection - so would barbarian chieftains for another notable example.
Meanwhile how useful are present day measures of wealth and income inequality? My take is that a fair bit of the alleged inequality is in the form of stock options and such, which are just not that valuable compared to money and overpriced particularly in today's economy. The US is doing ok with respect to the providing of services and things that would tie people to one place (as long as we can control stuff that hinders movement, like professional licensing or taxation of the moving of assets).
(Score: 0) by Anonymous Coward on Tuesday April 13 2021, @10:41PM
The system has checks and balances, and an ethical tradition. It worked great for generations, until the numbers got too big. A moral society is now just a chump for the prospective Robber Baron.
Long before G**gl* took down their "Don't Be Evil" motto, we knew it was all over. And before M*cr*s*ft began cutting off their competitors' air supply. Leverage your monopoly power? You'd be a sucker not to.
At one time, Mr Gates was too young to be a pillar of his community.
(Score: 5, Insightful) by bradley13 on Monday April 12 2021, @11:03AM (7 children)
Winston Churchill once said of democracy: "It has been said that democracy is the worst form of government except all the others that have been tried." Much the same could be said of capitalism. It's a system prone to abuses, but it remains infinitely better than socialism, communism, or any other system that has been tried.
The proper role of government is to minimize those abuses through regulation. I've mentioned before that one regulation should be to limit the size of companies. "Too big to fail" should not exist, nor should large companies be allowed to buy up their smaller, more nimble competitors.
The problem with top management salaries is similar. Imagine, for example, a regulation stating that the highest remuneration in a company could not exceed the lowest (including contracted employees) by more than a factor of - let's pick a number - 50. If the janitor earns $10/hour, for a full-time wage of $20k, then the CEO cannot earn more than $1 million (including bonuses, stock options, etc.). If the CEO wants a raise, he has to start with the janitor's salary.
Everyone is somebody else's weirdo.
(Score: 2) by EJ on Monday April 12 2021, @11:50AM (2 children)
Believe it or not, the SEC actually has some amount of power to require this type of thing for publicly traded companies.
(Score: 2) by hendrikboom on Monday April 12 2021, @12:49PM (1 child)
But do they?
(Score: 0) by Anonymous Coward on Monday April 12 2021, @11:46PM
no, they run interference for the established interests. just look at what they are doing against lbry/odysee.com right now.
(Score: 4, Insightful) by DannyB on Monday April 12 2021, @02:02PM (3 children)
Problem: today we have a lot of people who do not believe in democracy. If the election doesn't go their way, they are happy to overthrow, or to cheer on those who would overthrow the majority to install a minority into power. Then they refer to themselves as 'patriots'. Because they believe something that cannot be proven, despite all evidence to the contrary.
OMG! The dreaded word: regulation!
But seriously, if government didn't regulate things, then what other purpose would government have? The reason humans have had peacefully elected governments for a while now in modern times, is to have laws and regulations so that everyone can live together relatively peacefully. Norms of behavior at the very least. Laws if necessary.
Don't tell me you would want to burden the rich in order to give some people at the bottom a living wage?
The lower I set my standards the more accomplishments I have.
(Score: 0) by Anonymous Coward on Monday April 12 2021, @03:44PM
I'm not bradley13, but I would. Yeah, I'm kind of a bastard that way.
(Score: -1, Troll) by Anonymous Coward on Monday April 12 2021, @11:50PM
We need to break this country up. Fuck you dumb pieces of shit that voted for Biden/Harris. Please fucking start trying to take guns and see what happens. Please send Beto so i can feed him to the pigs. Ammo is pretty much sold out everywhere and guns are very limited. You bolsheviks are going to get yours soon.
(Score: 0) by Anonymous Coward on Wednesday April 14 2021, @01:35AM
On the contrary, it's not that they don't believe in democracy, it's that they believe the other party cheated.
There is some anecdotal evidence that they are right, but what convinces most of them is the resistance to changes that would reduce said cheating. Why would you oppose improving standards unless you are exploiting the low standards?
(Score: 2, Insightful) by Anonymous Coward on Monday April 12 2021, @11:30AM (7 children)
Probably because said CEOs and their board member buddies decide each other's pay, and get a summary approval at shareholders meetings. Not enough shareholder activism is the problem.
Almost as bad as members of parliament deciding their own pay.
(Score: 5, Interesting) by stretch611 on Monday April 12 2021, @12:01PM
As the parent AC said... The boards determine executive pay. Whats more is that in many cases, the CEO often is on the board for other companies and gives raises to CEOs who sit on his board in one huge circle jerk.
And CEOs never do anything wrong... If profits are up in a good economy, it is because of the CEO, not the economy. If profits are down in a down economy, its the economy's fault; not the CEO. And if a CEO is in the middle of a big f-up that ends up being so bad that the mainstream media reports... He will step down as CEO.... But of course retain his seats on the board in other companies. Only until he is forgotten and rises to become CEO of a different corporation.
And ofc, none of a companies actual workers have the experience to sit on a board, so their is no more hiring from within... That died 50 years ago. All board members must be hired from outside boards unless they happen to share the same last name of an existing board member. (but that is always a co-incidence.)
Now with 5 covid vaccine shots/boosters altering my DNA :P
(Score: 3, Insightful) by istartedi on Monday April 12 2021, @12:50PM (4 children)
I don't think shareholder activism can fix it. Even if you can get something placed on the ballot *and* convince lots of little fish to even pay attention to their proxy vote, often big fish hold the majority of the voting shares.
Even if the think the compensation is too high, they won't vote against it because a potential disruption in the C-suite is even more costly to shareholders, at least in the short run and that's very much the mentality.
Unfortunately, I think it has to be legislated. If they're all playing by the same rules, then nobody will jump ship because of a pay-cut, they'll all just bitch about it together and... donate the congresspeople. In fact, I'm pretty sure they're already doing that to prevent this from ever happening in the first place.
You'd need legislative integrity to make it happen. Nobody's holding their breath.
Appended to the end of comments you post. Max: 120 chars.
(Score: 2, Insightful) by khallow on Monday April 12 2021, @04:01PM (2 children)
In other words, a demonstration of the value of the CEO. OTOH, a large company that suddenly loses several hundred low level employees will not experience a similar disruption of their stock price.
(Score: 0) by Anonymous Coward on Monday April 12 2021, @06:44PM (1 child)
So then what does that tell you about the stock market?
(Score: 1) by khallow on Monday April 12 2021, @08:28PM
(Score: 0) by Anonymous Coward on Tuesday April 13 2021, @12:55AM
Hey, GP here.
When I wrote "shareholder activism", I didn't mean by you or me with our handful of shares. I meant by BlackRock or whichever significant shareholder has the direct voting power to make a difference.
But I agree with you that the likelihood of anything like this happening naturally without legislation is pretty low.
(Score: 2) by shortscreen on Monday April 12 2021, @08:39PM
You've correctly identified the people who have a say in the matter. But shareholders are just there to skim profits. It's why they bought the shares. They have little reason to object to the CEO doing the same thing.
(Score: -1, Flamebait) by Anonymous Coward on Monday April 12 2021, @11:40AM (7 children)
There are a limited number of older white males available to fill CEO slots, while Racialized populations keep growing like rabbits. Economics 101 tells us what will happen to their respective salaries.
(Score: 3, Funny) by Anonymous Coward on Monday April 12 2021, @12:08PM (2 children)
(Score: -1, Flamebait) by Anonymous Coward on Monday April 12 2021, @12:22PM (1 child)
As opposed to stuffing unqualified women and ethnics into positions just to meet a checklist. Remind me who thinks they're entitled...
(Score: 0) by Anonymous Coward on Monday April 12 2021, @03:50PM
Methinks your argument would be quite a bit stronger if you could demonstrate that those crusty old white guys were actually better qualified than women and "ethnics". Just sayin'.
(Score: 4, Insightful) by DannyB on Monday April 12 2021, @02:09PM (3 children)
I just want to mention The Peter Principle.
It has been hinted to me several times that I could move from senior developer into management.
I have pointed out that:
* I do not want to be in charge of human beings, there are others who are skilled at that
* The Peter Principle. I could move from what I am competent at into a role I would be incompetent at
* While I am all for increasing shareholder value, my focus is on how to make technology do that, rather than other means of increasing shareholder value that CxOs are more suited for
* There should be a career track for a developer without having to go into management
The lower I set my standards the more accomplishments I have.
(Score: 1, Insightful) by Anonymous Coward on Monday April 12 2021, @03:58PM (1 child)
There is. You just end up with a lower salary than your peers.
(Score: 2) by DannyB on Monday April 12 2021, @05:00PM
That is true.
Some peers who go into management are not so good at it, which is a more vulnerable place to be than being highly regarded at what you might have done in your previous position.
Managers get rated too. And even by people they manage.
The lower I set my standards the more accomplishments I have.
(Score: 5, Insightful) by sjames on Monday April 12 2021, @04:19PM
The fundamental fail there is that management is seen as ABOVE the roles that actually drive the company's value. So much so that a wet behind the ears new to management manager (been a manager for a whole hour) is seen as a step above a developer with 20 years experience. This in spite of the fact that a department would be better off making the senior developer the manager pro-temp than it would making an MBA manager the senior developer pro-temp.
Also worth considering, what will most impact company performance, the CEO decides to go golfing all day and some paper has to wait a day to be signed, or the custodian decides to golf all day and turning the building's HVAC back on has to wait a day.
(Score: 2) by Dr Spin on Monday April 12 2021, @12:44PM
The CxO is 320 times more powerful than the average Joe.
And because the French revolution was in France, not America.
Mme La Guillotine was French.
Warning: Opening your mouth may invalidate your brain!
(Score: 2) by oumuamua on Monday April 12 2021, @01:34PM (1 child)
I'm surprised this article has not yet been submitted on SoylentNews, the head of OpenAI, former head of Y Combinator, ought to be the most informed to comment on this subject:
https://www.techtimes.com/articles/258148/20210318/openai-give-13-500-american-adult-anually-sam-altman-world.htm [techtimes.com]
(Score: 4, Insightful) by DannyB on Monday April 12 2021, @02:11PM
I think that AI could indeed increase the amount of wealth.
What it means? The wealthy are going to get phenomenally wealthy.
(robots don't want to kill all humans, they just want to take all their jobs)
The lower I set my standards the more accomplishments I have.
(Score: 2) by wisnoskij on Monday April 12 2021, @01:36PM (15 children)
People have a problem thinking intuitively of large numbers.
But we have a problem here I will liken to a video game example. One of my favourite games the original Mount and Blade had a very poorly designed late game. After you had worked your way up to Lord of a country, their was not too many options. You turned your followers into vassal lords who controlled land, castles and men for you, but whenever you gave any of them anything all the others got jealous. And after you a certain point you had so many followers that any charity created a net loss of kingdom morale.
I 100% assure you that everyone up the chain of command would of wanted to give this janitor $10K and a 2 month vacation, but what about the 100k people who had worked their for 5+ years? HCA Healthcare is rich but it likely cannot afford to give every employee an extra $100 and it definitely cannot afford to teach its employees to expect that. Also this is the absolute worse time to be splurging on care packages when they should be ramping up capabilities.
Furthermore, we do not have a CEO salary problem, we have a company size problem. Including all the stock, performance incentives, and everything else that went into the $30 million dollar compensation, the CEO only made less than $.05 cents an hour per employee he was responsible for. This is also a dishonest evaluation. We are evaluation the CEO based on total compensation much of which will just be stock, while we are just measuring this employees salary based on his hourly revenue not his total compensation. Including all the incentives, Bonuses, etc he probably makes twice that amount in total compensation. Yes, I could agree that CEOs are treaty too lightly in the West, I would love to see the occasional CEO executed for gross negligence or illegal acts like in China, but they make peanuts compared to the their responsibilities.
We also have some very misleading wording here. This employee is likely getting a yearly bonus, that is a very common practice that is fairly universal. And the CEO did not get any bonus or raise, he got paid exactly what was stated in his contract, just because his stocks increased in value and any performance based incentives really kicked does not equate to a bonus.
(Score: 3, Informative) by BK on Monday April 12 2021, @04:44PM (13 children)
Not sure which universe you're referring to. The janitor probably doesn't get any kind of bonus. Even less likely if he's contracted. Nor do the cooks get a bonus at your favorite restaurant. Nor do the checkout clerks or stockers at your favorite retailer. Nor does the nurse at your hospital.
It's a common practice in certain professional and white collar jobs where production can allegedly be measured. But not in most jobs. Not even most 'professional' jobs. More like 'in certain industries and roles'.
...but you HAVE heard of me.
(Score: 2) by wisnoskij on Monday April 12 2021, @04:59PM (12 children)
I have literally never heard of anyone not receiving a christmas bonus. Hell I even got one once for having an unpaid mod position on a forum with zero responsibilities. Looking into it it appears about 2/3s of employees get one, I am really surprised it is that low. Still that probably gives him a 50/50 chance of one.
(Score: 2) by BK on Monday April 12 2021, @05:11PM (6 children)
[Citation Needed]
Your experience is probably not typical.
...but you HAVE heard of me.
(Score: 2) by wisnoskij on Monday April 12 2021, @05:30PM (5 children)
https://www.cnbc.com/2019/12/05/heres-where-employers-stand-on-2019-bonuses.html [cnbc.com]
(Score: 4, Informative) by BK on Monday April 12 2021, @08:06PM (4 children)
Let me help you read that article.
Companies were surveyed. They were of various sizes with different numbers of employees. The percentages given are percentages of companies. We would need to make the leap to assume that all companies were the same size for these numbers to mean a damn thing. Kind of like assuming spherical cows. But, let's run with this before we tear it apart more...
36% of companies surveyed gave no bonuses.
11% of companies gave 'non monetary gifts'. Think T-Shirts. Or maybe a donation in their name to The Human Fund.
------
47% of companies didn't give bonuses
+
24% of companies gave bonuses to select employees... executives, sales staff, etc. So most employees don't participate here. Managers maybe but not line workers.
------
71% of companies surveyed gave no bonuses to most or all of their employees.
+
20% of companies gave everyone a token bonus of $100 or less to everyone
------
91% of companies gave no bonuses OR gave minimal or token bonuses to most of their employees.
.
finally...
.
Just 9% of companies had a structured bonus or profit sharing plan that all or nearly all employees participated in.
.
So, if I assume that companies are all the same size, on average, with some hand waving and reasonable assumptions, I might conclude that 12% of employees... maybe 1 in 8... get meaningful bonuses that affect how we should look at their salaries. This is the 9% with the structured company wide plan plus a fraction of the employees in the 24% that give bonuses to select employees.
.
Thank you for the citation.
...but you HAVE heard of me.
(Score: 2) by wisnoskij on Monday April 12 2021, @08:26PM (3 children)
I am not sure exactly how to parse that.
Maybe it is just different in Canada https://www.cbc.ca/news/business/holiday-bonuses-1.5387582 [www.cbc.ca]
But we might also just be talking about different things. A Christmas bonus is just a few hundred dollars thrown out to employees so that even the least financially literate can afford to buy some presents for their kids. A structured profit sharing plan is just a different type of performance based compensation. It is like working for tips but since it is more complicated to calculate performance in most industries it is an end of year addendum. These are not bonuses as they are not discretionary. I absolutely believe you when you say that salaries based on profiting sharing are rare, I am surprised they are that high. But America is different from Canada if christmas bonuses are rare. Actually come to think of it, the forum christmas bonus was actually from an American company.
(Score: 2) by BK on Monday April 12 2021, @08:43PM (1 child)
You asserted in your first comment that we might be missing an aspect of employee compensation (when compared to CEOs) by not considering employee bonuses. I'm pointing out that those bonuses are not meaningful for most employees most of the time. Your citations support my assertion. The big number here is 230X.
Your latest citation speaks to the prevalence of holiday parties among employers. I'm sure that these have a cost. But it is unreasonable to consider these non-monetary items when discussing compensation. Yes, employers that throw parties are nice(er) to work for (if you like parties) than those that don't. But the existence, even the prevalence of parties, doesn't change the underlying math.
...but you HAVE heard of me.
(Score: 2) by wisnoskij on Monday April 12 2021, @08:57PM
Sure, that is reasonable. But also people with lower salaries are unequally affected by being given a couple hundred bucks. This guy could easily get a weeks or maybe even more salary gifted to him around Christmas time. He might have a retirement plan where the company matches his investments up to thousands of dollars, he might have health insurance, vacation days that he can even cash out at the end of the year. He would not be the only janitor to have stock options. A non hourly rate portion of a low level employees salary can be a huge monetary value, bigger than the CEOs in relative terms.
(Score: 0) by Anonymous Coward on Monday April 12 2021, @09:42PM
Someone else responded with a link to the CBC (https://www.cbc.ca/news/business/holiday-bonuses-1.5387582). From that link:
in Canada. Then https://soylentnews.org/comments.pl?noupdate=1&sid=42949&page=1&cid=1136642#commentwrap [soylentnews.org] doesn't know how to parse it? I mean, it's pretty damn clear, and it is NOT saying that most Canadians get a yearly bonus beyond a $25 gift card for sorely needed December groceries.
(Score: 1, Interesting) by Anonymous Coward on Monday April 12 2021, @06:45PM (3 children)
I worked at a place in the 90s that gave Christmas bonuses. At first they were cash added to our paychecks; at my level it was a couple of hundred bucks, not much, but still something. After a couple of years of that, they changed to being gift cards to restaurants or local retailers, either $20 or $50 depending on your title. Then came the year the CEO bravely gave a donation to charity in our names as our bonus. That's about when the phrase "rats from a sinking ship" got used a lot in casual conversation around the office.
That company doesn't exist anymore.
(Score: 0) by Anonymous Coward on Monday April 12 2021, @07:25PM (2 children)
Seriously?!? That sounds like the plot line to an episode of Big Bang Theory! Did the CEO get beat up every day in the parking lot for the next year?
Color me surprised. Why, you could have knocked me over with a feather!
(Score: 2) by BK on Monday April 12 2021, @07:40PM
Does anyone remember The Human Fund [youtube.com]?
...but you HAVE heard of me.
(Score: 0) by Anonymous Coward on Tuesday April 13 2021, @01:31AM
"Seriously?!? That sounds like the plot line to an episode of Big Bang Theory! Did the CEO get beat up every day in the parking lot for the next year?"
Called tax write off
"Color me surprised. Why, you could have knocked me over with a feather!"
Poof smack!
(Score: 0) by Anonymous Coward on Tuesday April 13 2021, @04:30AM
I've never received a Christmas bonus at any of my jobs over the course of the last couple decades. The closest thing I got was $100 and a thousand points at my current job, but it wasn't really a holiday thing, it was an attempt at retaining people during the pandemic. Perhaps if you live in certain areas and are of a certain class that might be true, but for most workers, that's just not the case.
(Score: 1) by khallow on Tuesday April 13 2021, @11:19AM
I wouldn't. The corruption alone more than outweighs those occasional examples.