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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: 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.
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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.
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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
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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.