Are you referring to my post that Omar was replying to? If so, do me the courtesy of addressing me directly.
A. I hadn’t bothered to re-read your part of the post, so I couldn’t say if it was in re: your post or not, that’s why I didn’t name the poster.
B. I came back here to apologize to whoever it was (now, I guess it *was *you) for my presuming to make such a harsh statement without knowing the facts.
I do sincerely apologize for this behavior, and trying to put you in an unfavorable light. There is no excuse for it, and I am relying on your good manners to be a bigger person than I was, and to forgive me for this truly inexcusable behavior.
Thanks,
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Tell you what. When the guy in the mailroom is ready to take the responsibility for driving the direction and overall strategy of a multi-billion dollar organization that provides the livelihood for hundreds or even thousands of people, then I would be ready to believe their salaries should be comparible. Plenty of people out there willing to hand office workers their mail.
The “problem” isn’t that that executives make so much more than the mailroom guy. The problem is this growing disconnect between the concepts of “hard work” and “success”. People do not equate the two. They think the CEO or their middle manager boss apparently were born into their job or won it on a quiz show, while any work they are asked to perform is apparently beneath them.
The fundamental concept of capitalism, even economics in general, is everyone needs somthing someone else has. So the basic question is, why should they give it to them?
No worries. I was just curious if there was some particular point you were trying to make.
What responsibility does the CEO take? If he succeeds, the company pays him a fortune. If he fails, the company pays him a fortune to go away.
Not that this idea comes from, or is endorsed by the Occupy movement, but do those defending the 1% believe the market for those jobs is pure free enterprise? Is it a truly free market, or at least as free as the rest of the economy? I’ll start to believe that when a company keeps their manufacturing and technical staff in the U.S. and sends their top executive jobs to Bangalore.
The key problem is regulatory. Lax rules about required SEC filings that would empower shareholders to hold corporate directors accountable for inflated salaries. Lax regulatory oversight leading to inhibited competition leading to obscene company profits. Lax oversight leading to “too big to fail” gambles being necessary to survive in a competitive environment. It’s the job of these financial firms to compete against each other to make money. They do whatever they can within the rules. They have to; if they don’t, someone else will. This is why regulation is important, and it is why the blame wholly is on the shoulders of our political representatives, so beholden to corporate interests they are more or less corrupt. I place the majority of the blame is on those on the right who work to financially cripple the regulatory agencies whose job it is to enforce a functional free market environment. The focus on wall street and CEOs is myopic, naive.
Do CEOs work 40 times harder than they did in the 60s? Because that’s how much their pay has grown relative to the average worker. Are CEOs just fabulous competant supermen now, genetically engineered to all be decisive geniuses who use time machines to work 300 hours a week?
CEOs don’t make their actual value to the company in many cases. It’s often collusion. Executive boards are often run by the same people at various companies, who agree to vote for extremely high salaries for one company if the recipient agrees to return the favor.
Additionally, their pay is often tied to stock options which is disconnected from the actual value to their company. This has lead to CEOs no longer being the stewards of the long term interest of their companies, but people who want to jack up their stock immediately, cash in, and bail, leaving the company worse off than they had it.
They’ll cut off valuable members of the work force and cut costs in other ways that’s detrimental to the long term health of the company, but hey, if they get those quarterly profit numbers up a bit, they can cash in and retire on their multimillion dollar contracts while the company burns around them. Hell, a lot of the time they don’t even have to be successful at raising the stock price - they can cause the company to crash and burn, and their contract still says they get paid millions for it.
Again, here is this concept that workers are “entitled” to their jobs or particular salary. Or that a company is even entitled to exist.
Michael Moore likes to complain about GM leaving Flint, MI and it’s effect on the city. But GM still employs like 200,000 people. What makes Flint, MI any more or less important than the towns where those people live?
You somehow got that from my post? Read it again; I didn’t say anything even remotely like that.
My point is that executives try to cast themselves as special. They try to create the myth that they are each a uniquely talented individual; that no one else could do what they do. they don’t even get a salary, they get “compensation”; suggesting that their ideas are truly worth the millions they’re paid. If anything, it’s the executives who act as though they’re “entitled” to their jobs. Meanwhile everyone else is just headcount, and if they can rent ten tons of engineer for a cheaper price in India, they do it.
I think the whole “executives deserve whatever price they can negotiate for themselves” argument fails to recognize that they have exempted themselves from the same competitive pressures that they apply to the rest of us. Or show me a company that has fired their ten-million-dollar CEO and hired his replacement in Bangalore.
Moving thread from IMHO to Great Debates.
So go become one.
Can you do what they do? Do you even know what executives do?
Well, when you have a Wharton MBA and 30 years of industry leadership experience, I’m sure you wll be able to negotiate a better price.
I think Apple is going to fill Steve Job’s old spot with an Indian call center that will generate new ideas for iPads and whatnot.
Is it fair that pro athletes make more than pro physicists? No. Get over it. They happen to have a skill set that is in high demand. Same goes for CEOs, whether or not you resent the fact that they didn’t have to go to spend 6 years in a PhD program or whatever.
Oh, now I place the face, he was part of the Man Show, that weekly telethon for tesosterone poisonong. I guess he’s audtioning for Dennis Miller’s job. But he’s not as funny. Unless he’s not *trying *to be funny, unless he’s presenting an intelligent, thoughtful critique of the OWS movement. In that case, he’s sorta funny.
Based on a perusal of their testimony before Congress, it appears that most executives neither do nor know anything.
I have been following AC career since he started out on the local radio station here in LA.
He has been down and out, and has worked his ass off, and no longer is down and out. Part luck, I am sure, but a large portion of very hard work. Nobody gave him anything.
I admire the guy. I don’t always agree with him, but in this case I do.
WRT CEO salaries. As a friend of mine used to say “If you sell your body for money get as much as you can.” This is what I do in a job interview, and you probably do the same. Is it wrong that a CEO does the same?
What is so objectively correct about what CEOs made in the 60s? Maybe they were underpaid then and are correctly paid now.
The economics of the sixties in regard to CEO pay seemed to make more sense. You had fewer CEOs pumping up their companies by inflating stock value and cashing out, leaving the company permanently damaged. You didn’t constantly hear about a CEO that massively failed a company but gets to leave with his ten million dollar golden parachute anyway.
The very idea that CEOs can be horrible, fail massively, and still make tons from the companies they ruined obviously suggests that something is wrong with the system. One can at least sort of argue “if he makes the company a hundred million dollars more than they would’ve otherwise made, he deserves his salary of ten million”, but how do you argue “if he loses the company a hundred million due to incompetance, resigns in disgrace, he still gets his ten million salary”?
Boards of executives across an industry scratch each other’s backs. It’s collusion. And and it costs our companies and our economies not just the extremely high CEO salaries, but also the damage they do to companies in their quest to raise their stock prices in the short term so that they can cash out.
It’s more plausible that CEO pay for basically the entire history of the country has been more rational, and only in recent times has become out of whack, than to think that no one understood the value of CEOs until just recently.
Well, that may or may not be true. Your perception is not a fact.
But anyway, what makes you think that the economic environment today is the same as it was in the 60s, when there was much less global competition? Things change. I see no reason to think that the way we did things 50 years ago is the way we should do them today.
Hell, maybe CEOs should make less than they did in the 60s. If only there was some mechanism for determining the worth of something…
Do you dismiss the idea of collusion amongst board of directors, who are often staffed by the same people over several companies, and many times the same people are voting about the pay of the people who make up the boards?
Assuming that the free market is perfect, and that every result of the free market was realized in ideal circumstances, is pretty much an article of faith. It generally works, and generally results in rational results, but there are issues such as collusion which can distort it. Your argument seems to essentially be “they make that much, therefore they deserve to make that much, and there’s nothing wrong with it”
That’s what federal oversight is for. Antitrust legislation and so on. One of the “and so ons” being requirements for filing of information so that shareholders can hold board directors accountable, etc… and of course if they manage around it and still wantonly distribute company profits among executives, then the system is ripe for a more efficient competitor to step in. If that doesn’t happen, it’s the fault of weak antitrust legislation. This all comes down to federal oversight.
No, I don’t. Do you think that wasn’t happening in the 60s?
I don’t know what anyone “deserves” to make. That’s why I said that maybe they should make less than what the CEOs made in the 60s. I just think the whole bit about what CEOs made in the 60s isn’t all that important. Things were different in the 60s. I can’t wrap my brain around the idea that there is some objective way to determine if someone is making too much or too little except as reflected in the market.