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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: 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.