# CEO's pay -- 300 times regular folks'! **URL:** \ **Category:** Great Debates\ **Created:** [June 23, 2015, 4:59pm UTC](https://boards.straightdope.com/t/ceos-pay-300-times-regular-folks/723259 "2015-06-23T16:59:20Z")\ **Posts on this page:** 20\ **Page:** 3
**Author:** ![Dibbs](https://avatars.discourse-cdn.com/v4/letter/d/da6949/32.png) [@Dibbs](https://boards.straightdope.com/u/Dibbs)\ **Post date:** [June 23, 2015, 11:07pm UTC](https://boards.straightdope.com/t/ceos-pay-300-times-regular-folks/723259/41 "2015-06-23T23:07:20Z")
> [@Shodan](#): > > No, we can’t. I don’t agree that it is inherently unfair that a CEO should make 300X more than a janitor. > > “He makes more than me - no fair!!” is not the end of a debate. > > Regards, > Shodan Obviously you’ve never cleaned the scum from billions of urinals.:mad: I never said there ought not be “reasonable” compensation for CEOs, even for those that simply step into an outfit that they didn’t create. Regards, Dibbs (the janitor that got screwed out of a job by a greedy CEO) ---
**Author:** ![Dibbs](https://avatars.discourse-cdn.com/v4/letter/d/da6949/32.png) [@Dibbs](https://boards.straightdope.com/u/Dibbs)\ **Post date:** [June 23, 2015, 11:34pm UTC](https://boards.straightdope.com/t/ceos-pay-300-times-regular-folks/723259/42 "2015-06-23T23:34:01Z")
> [@Mr\_Smashy](#): > > This is the crux of the issue. It’s up to the board how much they want to pay the CEO, and it isn’t money coming out of the pockets of the workers, as much as the class warriors would have you believe. If anything, the bulk of the money comes out of the shareholders (owners). > > And you don’t get to be CEO, usually, at those pay levels without having a track record of success (or serious political connections, like the example above with Corzine and Obama’s golfing buddy Dimon). With regard to the first part of your second sentence: Of course those on the board want to keep the insane amounts of dough going to their members because the name of the game is “you take care of me, and I’ll take care of you.” Those that they have to answer to are too afraid and intimidated to question those evildoers, as they often have high degrees from big name universities. When the CEO that came in and did her thing where I had worked, I’m sure the first thing she did (after throwing the last of hundreds of us out into the streets) was to get those she has to answer to into a big room and – with a laser pointer in her greedy hand --went into a happy little jig and pointed at the numbers on the screen and their trajectory saying, “Look! You were all so concerned at how I’d thrown those overpaid people (that had garnered well over 70% of the world’s market!) out of the company and replaced them with others willing to work for much less; well just look at what we can expect just two quarter from now! And it only gets better as time goes on!” (And I’m sure they all enjoyed some cookies and Kool-Aid in the lobby following that bit of horsehit.) I can see through these people like the colostomy bags that they are. GREED is in! Btw, the millionaire lady that brazenly did her money-grab was found to have “padded” (I call it lying!) her resume and even though she’s driven the company into the ground sine then to where one property after another has had to be sold so as to keep things half-way solvent, she’s STILL THERE!) One other thing. The gal that got the job has a second-tier degree from a second rate university, making me think the black candle thing might not be so off the mark after all. There’s more to this world than what meets the eyes. ---
**Author:** ![Ruken](https://avatars.discourse-cdn.com/v4/letter/r/f475e1/32.png) [@Ruken](https://boards.straightdope.com/u/Ruken)\ **Post date:** [June 23, 2015, 11:45pm UTC](https://boards.straightdope.com/t/ceos-pay-300-times-regular-folks/723259/43 "2015-06-23T23:45:11Z")
Would anyone like a spoonful of Dunning–Kruger with their tea this evening? ---
**Author:** ![Typo\_Negative](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/typo_negative/32/484_2.png) [@Typo\_Negative](https://boards.straightdope.com/u/Typo_Negative)\ **Post date:** [June 24, 2015, 12:01am UTC](https://boards.straightdope.com/t/ceos-pay-300-times-regular-folks/723259/44 "2015-06-24T00:01:01Z")
> [@John\_Mace](#): > > Actually, he was both. He built it, was fired, and then was re-hired to run it _when it was 1 step away from bankruptcy or being sold_. I doubt more than a handful of people could have done what he did in his second career at Apple. Well…I did not know that. ---
**Author:** ![Bone](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/bone/32/407_2.png) [@Bone](https://boards.straightdope.com/u/Bone)\ **Post date:** [June 24, 2015, 12:08am UTC](https://boards.straightdope.com/t/ceos-pay-300-times-regular-folks/723259/45 "2015-06-24T00:08:54Z")
I think the world Dibbs describes is more like a cartoon version of Monopoly than reality. ---
**Author:** ![Dibbs](https://avatars.discourse-cdn.com/v4/letter/d/da6949/32.png) [@Dibbs](https://boards.straightdope.com/u/Dibbs)\ **Post date:** [June 24, 2015, 12:12am UTC](https://boards.straightdope.com/t/ceos-pay-300-times-regular-folks/723259/46 "2015-06-24T00:12:18Z")
> [@Ace309](#): > > How do you know we can toss them before we scrutinize them? > > Further, what factors do you think are in play? I took some presumptuous liberty, believing that any reasonable person would consider things and quickly see that much, if not all, of the construct needs to be either junked or overhauled. The factors at play relate to how some folks have taken certain seats of power in the corporate world and have decided that because they can intimidate and screw-over others in order to get more of the almighty dollar into their pockets because of their titles – though they themselves haven’t created a thing – should go ahead and do it, no matter how much pain it causes their fellow human beings. CEOs and NBA players do things that matter and, in the case of the CEO, probably should make significantly more than a lowly janitor. But how much more is the issue? Certainly not to where the janitor gets so few bucks that it’s a serious week to week struggle just to stay alive! ---
**Author:** ![John\_Mace](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/john_mace/32/185_2.png) [@John\_Mace](https://boards.straightdope.com/u/John_Mace)\ **Post date:** [June 24, 2015, 12:28am UTC](https://boards.straightdope.com/t/ceos-pay-300-times-regular-folks/723259/47 "2015-06-24T00:28:11Z")
> [@Dibbs](#): > > Not so fast! Jobs CREATED (along with that other guy) the company. These other type of CEOs are scoundrels that might have gotten their sweet jobs via black candles and pentagrams … for all I know. > > It’s one thing to create a company, it’s another to step in and do a little tweak here and there, throw around a few big words to make it look like you know what you’re doing … before squeezing the company dry and then heading off for Maui! Jobs did both. Read the blurb on him in wikipedia. He was fired, then rehired quite a few years later and saved the company. Do you want a serious debate or just a rant about CEOs you don’t like? I’m at the point of giving up on trying to help you understand. ---
**Author:** ![Dibbs](https://avatars.discourse-cdn.com/v4/letter/d/da6949/32.png) [@Dibbs](https://boards.straightdope.com/u/Dibbs)\ **Post date:** [June 24, 2015, 12:40am UTC](https://boards.straightdope.com/t/ceos-pay-300-times-regular-folks/723259/48 "2015-06-24T00:40:36Z")
[quote=“John\_Mace, post:37, topic:723259”] Just to be clear, I’m sure there are many CEOs that, because of the cozy relationship they have with the BoD, get pay packages beyond what they should. That’s a problem we should try to fix. Who ever said or implied this: But the idea that all CEOs sit around rolling the dice and dodging responsibility is a cartoonish view not even worthy of debate. I did say that a CEOs job doesn’t seem like it would be all that tough, tough being tough relative to how much dough they’re not sharing with folks under them that are busting their butts to keep their companies profitable. Your first paragraph has it right; and that’s why I brought up the issue. And the “fix” is to start by agreeing that many “get pay packages beyond what they should,” and then change the situation by dividing the Pie more fairly. ---
**Author:** ![Little\_Nemo](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/little_nemo/32/3120_2.png) [@Little\_Nemo](https://boards.straightdope.com/u/Little_Nemo)\ **Post date:** [June 24, 2015, 12:42am UTC](https://boards.straightdope.com/t/ceos-pay-300-times-regular-folks/723259/49 "2015-06-24T00:42:02Z")
> [@Dibbs](#): > > Those are all good comments. But isn’t it true that CEOs merely get data from someone that collected it and then, after pondering it (with a couple of martinis in the belly), they throoow the dice? > [@John\_Mace](#): > > Is that what you think Steve Jobs did while he was CEO of Apple? If so, then I don’t think any further discussion will be fruitful. > [@Little\_Nemo](#): > > Are you saying Steve Jobs is a typical CEO? > [@John\_Mace](#): > > Are you saying you think I might possibly be saying that Jobs is a typical CEO? Honestly, that did appear to be what you were saying. Dibbs said CEOs and you answered Steve Jobs and said that ended the discussion. That does seem to imply that Jobs stands for all CEOs. If you meant something else, I missed it. ---
**Author:** ![Dibbs](https://avatars.discourse-cdn.com/v4/letter/d/da6949/32.png) [@Dibbs](https://boards.straightdope.com/u/Dibbs)\ **Post date:** [June 24, 2015, 12:44am UTC](https://boards.straightdope.com/t/ceos-pay-300-times-regular-folks/723259/50 "2015-06-24T00:44:37Z")
> [@Bone](#): > > I think the world Dibbs describes is more like a cartoon version of Monopoly than reality. Please cite where I described the world. ---
**Author:** ![Bone](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/bone/32/407_2.png) [@Bone](https://boards.straightdope.com/u/Bone)\ **Post date:** [June 24, 2015, 12:56am UTC](https://boards.straightdope.com/t/ceos-pay-300-times-regular-folks/723259/51 "2015-06-24T00:56:31Z")
> [@Dibbs](#): > > Please cite where I described the world. > [@Dibbs](#): > > As an out of work janitor that busted my butt for 18-years at a manufacturing plant, only to end up having **my job taken due to a certain greedy CEO that came in and conducted a “pay analysis study”** immediately following her pocketing $6.4-million from the corporate treasury, I can tell you that the activity in question is no victimless crime. (She did that clever move after having been at the job for a mere 6-months, incidentally.) > [@Dibbs](#): > > Those are all good comments. **But isn’t it true that CEOs merely get data from someone that collected it and then, after pondering it (with a couple of martinis in the belly), they throoow the dice?** > [@Dibbs](#): > > Well, if I were the benevolent, wise, iron-fisted dictator that this world so needs, I’d smash the whole construct into bits and start over **by mathematisizing every job occupation under the sun and place it within a philosophical framework that begins with the question, What is happiness?** > > By doing this, the “needs” and the “wants” would be separated and from there the formula would move to a what’s “fair and ethical” point with a specific numerical dollar value affixed on a sliding scale … and a wrecking would deal with Wall Street as the crooks doing the backroom deals would have to get real jobs, as their world would mercifully no longer exist. > [@Dibbs](#): > > It’s one thing to create a company, \*\*it’s another to step in and do a little tweak here and there, throw around a few big words to make it look like you know what you’re doing \*\*… before squeezing the company dry and then heading off for Maui! > [@Dibbs](#): > > Regards, > Dibbs (**the janitor that got screwed out of a job by a greedy CEO)** > [@Dibbs](#): > > When the CEO that came in and did her thing where I had worked, \*\*I’m sure the first thing she did (after throwing the last of hundreds of us out into the streets) \*\*was to get those she has to answer to into a big room and – with a laser pointer in her greedy hand --went into a happy little jig and pointed at the numbers on the screen and their trajectory saying, “Look! You were all so concerned at how I’d thrown those overpaid people (that had garnered well over 70% of the world’s market!) out of the company and replaced them with others willing to work for much less; well just look at what we can expect just two quarter from now! And it only gets better as time goes on!” > (And I’m sure they all enjoyed some cookies and Kool-Aid in the lobby following that bit of horsehit.) This is cartoon land. You were a janitor. The company decided your services weren’t worth what they were paying. You got fired. It’s unfortunate on a personal level, but your assessment of the skill set and motivations of various CEOs is laughably bad. The world that you describe is the one where your assessments are reasonable. In reality, your assessments are very poor. ---
**Author:** ![Little\_Nemo](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/little_nemo/32/3120_2.png) [@Little\_Nemo](https://boards.straightdope.com/u/Little_Nemo)\ **Post date:** [June 24, 2015, 1:03am UTC](https://boards.straightdope.com/t/ceos-pay-300-times-regular-folks/723259/52 "2015-06-24T01:03:11Z")
Personally, I think people like Jobs and Gates deserve all the money they’ve made. But not every CEO is at their level. In fact, I doubt most CEOs approach their level. Some CEOs aren’t at that level but are contributing to the well being of their corporation. Some CEOs are just filling the chair and doing a typical job. A few are below that and are harming the corporation they’re running. And some are just looking out for themselves and are willing to loot their company and get as much out of it personally as they can with no interest in the long term effects of their actions. Hopefully everyone will agree that all of the CEOs I just described exist in the real world. But our current system of CEO salaries seems to assume every CEO is in the top tier and deserves the rewards appropriate to that level. Apparently on corporate boards it is possible for everyone to be above average. People get rewarded based on some collective ideal rather than on their individual capabilities and merits. And incompetents get protected by having their performances averaged in with those who are doing better jobs than they are. It’s almost as if corporate boards were unionized. ---
**Author:** ![Chronos](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/chronos/32/134_2.png) [@Chronos](https://boards.straightdope.com/u/Chronos)\ **Post date:** [June 24, 2015, 1:05am UTC](https://boards.straightdope.com/t/ceos-pay-300-times-regular-folks/723259/53 "2015-06-24T01:05:26Z")
It certainly isn’t true that CEO compensation at large companies is proportional to their worth to the company. It might be correlated, but it isn’t proportional. If it were proportional, then a CEO who caused the company to lose money would also lose money. Not just get rich slower, but have to actually pay money back. If that were the case, if CEOs actually had a stake in the game, then I for one wouldn’t see any grounds to complain about how much they’re paid. ---
**Author:** ![septimus](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/septimus/32/410_2.png) [@septimus](https://boards.straightdope.com/u/septimus)\ **Post date:** [June 24, 2015, 1:32am UTC](https://boards.straightdope.com/t/ceos-pay-300-times-regular-folks/723259/54 "2015-06-24T01:32:51Z")
There is an in-crowd of board directors, often themselves present or past CEOs, who bid up CEO salaries. The boards prepare proxy documents, and enough fund managers are affiliated with the “in-crowd” to go along. CEO’s are not the only high-paid people, of course. I think today’s athlete salaries are way high. While only a tiny part of a BigMac’s price pays McDonald’s CEO, high athlete salaries make it hard for working-class to afford major league tickets. A society with less wealth and income inequality is a happier healthier society. (To demonstrate this we don’t look to North Korea … but just to U.S. itself 50 years ago.) Minimum wage laws and progressive income tax are simple ways to help redress the imbalance. But envy and greed do not define the path forward. > [@Amateur\_Barbarian](#): > > Short of trying to regulate C-level pay, how do you propose to solve the problem? It is often proposed that salaries as a corporate income tax deduction be allowed only up to some per-individual threshold. To have bite, this approach would depend on a higher corporate tax rate. ---
**Author:** ![Shalmanese](https://avatars.discourse-cdn.com/v4/letter/s/45deac/32.png) [@Shalmanese](https://boards.straightdope.com/u/Shalmanese)\ **Post date:** [June 24, 2015, 1:50am UTC](https://boards.straightdope.com/t/ceos-pay-300-times-regular-folks/723259/55 "2015-06-24T01:50:29Z")
OK, so do you agree that a horrible, no good, very bad CEO could completely ruin a company and potentially destroy billions of dollars of value? We all seem to be in agreement that there are plenty of absolutely horrible CEOs who have caused a lot of harm for everyone, right? Now, if someone came to you and said they were able to 100% absolutely guarantee that they were not a horrible, no good, very bad CEO, how much would you pay them to run your company? It would be a lot, right? Because you could be avoiding Billions of dollars in losses with a guarantee like that, we all agree that person should be hired, instead of the awful CEO, even if they cost a lot, right? Like, hundreds of millions of dollars a lot, right? That’s an absolute bargain even at $100M! Now, of course, nobody can make that guarantee or the world would be a lot simpler and we wouldn’t have any horrible CEOs but what if a person came to you and said he had even 10% less of a chance of not being a horrible CEO and you believed her? Even if she’s only 10% less likely to be a horrible CEO than the next guy, that’s still worth, potentially, $10M and still be a bargain. That’s the reality of the situation, the job is hard enough and luck plays a big enough part that all the best CEO can promise you is they might be 10% better than the next guy at not fucking up. They’re still going to screw up and, in the benefit of hindsight, you’ll still be able to pin the blame on them for not making the right moves but they’re marginally better than the last guy at not fucking up. But it’s because the stakes are so high that the pay is so high. A janitor, no matter how bad they are at their job, can’t cause more than a few thousand dollars of damage before they get fired. A bad CEO could potentially cause [billions of dollars](http://fortune.com/2015/02/26/sears-earnings/) in damage and so you’re willing to pay millions for the guy who’s just a hair better than the other guy. ---
**Author:** ![Shalmanese](https://avatars.discourse-cdn.com/v4/letter/s/45deac/32.png) [@Shalmanese](https://boards.straightdope.com/u/Shalmanese)\ **Post date:** [June 24, 2015, 2:05am UTC](https://boards.straightdope.com/t/ceos-pay-300-times-regular-folks/723259/56 "2015-06-24T02:05:10Z")
> [@septimus](#): > > There is an in-crowd of board directors, often themselves present or past CEOs, who bid up CEO salaries. The boards prepare proxy documents, and enough fund managers are affiliated with the “in-crowd” to go along. CEO’s are not the only high-paid people, of course. I think today’s athlete salaries are way high. While only a tiny part of a BigMac’s price pays McDonald’s CEO, high athlete salaries make it hard for working-class to afford major league tickets. A society with less wealth and income inequality is a happier healthier society. (To demonstrate this we don’t look to North Korea … but just to U.S. itself 50 years ago.) Minimum wage laws and progressive income tax are simple ways to help redress the imbalance. Except corporate raiders who end up taking a company private usually end up paying the CEO _more_ than what the previous CEO on the public market was getting. If you’re the owner of the company, you have no incentive to engage in corruption or buddying up that’s taking money directly out of your own pocket. What this is suggesting is that CEO pay in the public market is actually depressed by the perception of excessive pay and people who now longer have to worry about market pressures actually find it rational to spend even more money on CEOs. ---
**Author:** ![DMC](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/dmc/32/18049_2.png) [@DMC](https://boards.straightdope.com/u/DMC)\ **Post date:** [June 24, 2015, 2:42am UTC](https://boards.straightdope.com/t/ceos-pay-300-times-regular-folks/723259/57 "2015-06-24T02:42:33Z")
> [@Mr\_Smashy](#): > > Again, since the bulk of the big paydays comes from stock options, the correlation is near perfect. In fact, many comp plans are based on how much your stock price increases _over and above_ the S&P 500 or Wilshire, so the CEO doesn’t merely benefit from a rising tide lifting all boats. [The bulk of their pay doesn’t come from stock options.](http://blogs.wsj.com/cfo/2013/08/26/last-gasp-for-stock-options/) Additionally, [the correlation between compensation and stock returns is almost non-existent](http://www.bloomberg.com/bw/articles/2014-07-22/for-ceos-correlation-between-pay-and-stock-performance-is-pretty-random). Other than your entire post, everything else you claimed is of course spot on. ---
**Author:** ![John\_Mace](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/john_mace/32/185_2.png) [@John\_Mace](https://boards.straightdope.com/u/John_Mace)\ **Post date:** [June 24, 2015, 3:01am UTC](https://boards.straightdope.com/t/ceos-pay-300-times-regular-folks/723259/58 "2015-06-24T03:01:28Z")
> [@Little\_Nemo](#): > > Honestly, that did appear to be what you were saying. Dibbs said CEOs and you answered Steve Jobs and said that ended the discussion. That does seem to imply that Jobs stands for all CEOs. > > If you meant something else, I missed it. At this point I’m just going to bow out of this thread. I don’t see that people are interested in reasoned debate, but just want to score gotcha points and vent about evil CEOs. You’re not the worst offender, but yours is the last post I saw. ---
**Author:** ![Little\_Nemo](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/little_nemo/32/3120_2.png) [@Little\_Nemo](https://boards.straightdope.com/u/Little_Nemo)\ **Post date:** [June 24, 2015, 3:42am UTC](https://boards.straightdope.com/t/ceos-pay-300-times-regular-folks/723259/59 "2015-06-24T03:42:03Z")
> [@John\_Mace](#): > > At this point I’m just going to bow out of this thread. I don’t see that people are interested in reasoned debate, but just want to score gotcha points and vent about evil CEOs. You’re not the worst offender, but yours is the last post I saw. This has happened before in communications between us. You appear to be saying one thing and I’m getting a different message. Perhaps it’s you not being clear enough. Perhaps it’s me not having sufficient understanding. But I assure you I’m not playing any games. I really am responding to what I think you’re saying. I prefer you didn’t bow out of the thread. I’d rather you stayed and just explained what you meant at a more basic level. ---
**Author:** ![Bone](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/bone/32/407_2.png) [@Bone](https://boards.straightdope.com/u/Bone)\ **Post date:** [June 24, 2015, 4:01am UTC](https://boards.straightdope.com/t/ceos-pay-300-times-regular-folks/723259/60 "2015-06-24T04:01:51Z")
> [@Little\_Nemo](#): > > Honestly, that did appear to be what you were saying. Dibbs said CEOs and you answered Steve Jobs and said that ended the discussion. That does seem to imply that Jobs stands for all CEOs. > > If you meant something else, I missed it. FWIW, what John is saying is pretty clear to me and it seems like you’d have to purposley misunderstand to not get it, but I take you at face value that you are interpreting it in the way you say. Dibbs made an outlandish comment about what CEOs do, John responded by asking if Dibbs thought Jobs did that too. If he thought that, then John could reasonably conclude that Dibbs wasn’t prepared to have a discussion at the level John is accustomed (John works in Silicon Valley dontchaknow). This doesn’t mean Jobs is a typical CEO - this is later reinforced since John exhalted the skills of Jobs to save Apple and stated that very few people could have done what he did. That is why it’s odd that you would infer John believes that Jobs was typical. It’s not a reasonable interpretation of John’s statements. That’s why he responded so incredulously - because in his mind - and mine btw - your inference is absurd. I’m not John, but that’s my take. Like I said, I take you at face value. [Previous page](https://boards.straightdope.com/t/ceos-pay-300-times-regular-folks/723259.md?page=2) [Next page](https://boards.straightdope.com/t/ceos-pay-300-times-regular-folks/723259.md?page=4)