Who paid the bill for that $20 billion? Shareholders and consumers. Who won? Jamie Dimon.
Or this:
Not bad for shit canning the whole company.
Or this:
Not bad for putting a storied financial firm in the grave. That is about $44 million per year on average. Glad to see his income matched his performance.
The problem is all these guys sit on the boards of all these other guys. So A is on B’s board. B is on C’s board and C is on A’s board.
It is a cozy and incestuous relationship and it is in all their interest to never throw anyone under the bus.
Want to fix this problem something needs to be done about the circlejerk boards of directors and there should be clawback provisions on all their income for ten years. If they offshore their income they should be criminally prosecuted.
I think we can agree that Steve Jobs should not be a part of the discussion. Steve Jobs wasn’t hired to run Apple, he built it.
I think, and correct me if I am wrong, the OP is referring to CEO hired guns. So we are talking less Steve Jobs, more Carly Fiorina and Chuck Conaway and these other flame-outs.
I guess, when it comes right down to it, nobody cares if the CEO makes a bajillion dollars if the company thrives. We only care when they make a bajillion bucks, run the company into bankruptcy, layoff workers and do no better than we ourselves could have done. Which, to a lay-observer or recently laid-off worker, seems more like the norm.
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.
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).
We’re talking about American CEOs. If you want to compare the average American worker to the average worker in the entire world, you’re going to find that the former is immensely wealthy by comparison.
My point stands. People almost never know precisely what they are talking about when they refer to CEOs earning 300x worker pay. Do you disagree?
I do not know what other people do or do not know.
That said:
There is a graph in that article that notes the top 0.01% of Americans control wealth equal to the bottom 2/3 of all Americans.
So I think my point still stands. As small as the slice looks at the top in your citation it is anything but a small slice and that is where the problem lies. Your citation just notes it is a relatively few people doing it.
I don’t see what that has to do with whether or not any CEOs are worth 300x the pay of the average worker, which is what he OP is asking in this thread. Are you saying that no CEO is worth that? If not, why not?
Seems to me we should start by deciding if any CEO is worth that (and I put forth one reason in my first post). From there we can move to a discussion about under what circumstances that is true.
I work in financial media and it is fascinating that when anything goes wrong at a company the problem is anything BUT the person at the top. If the company makes money then it is all because of their brilliant leadership and they earned every dime.
If we cloned Warren Buffet and populated the earth with him would they all be billionaires because they are all equally brilliant?
Can you pick the CEO of any company and say, if they quit the job tomorrow, that the company would falter? If yes then, maybe, they deserve their salary.
When you look how most of these companies make money it is in finance, inflating share prices through stock buybacks, mergers, layoffs and lobbying for protection. Rarely are they innovating and producing.
Cool story, bro. But meaningless. I can tell a story about a CEO who takes responsibility for all the bad stuff, too. But that would also be meaningless.
Are you saying a CEO is only worth his pay if he could be cloned and that the clone could repeat the success of the parent? If not, I fail to see your point.
First of all, most companies would probably falter if the CEO quit and no one else replaced him or her. So that just says you need to find another good CEO. But I would not say that a CEO is worth mega-bucks just to make sure a company doesn’t “falter”, so that doesn’t prove anything. As noted in my first post, a CEO has the ability to drastically affect share price. If he does a good enough job, $12M/year is a fraction of the return he’s generated for shareholders. It’s less than what you pay your mutual fund manager, percentage wise, to perform half that well.
Finally, I don’t need to pick shit. It’s your argument. If you think every corporations could lose their CEO tomorrow and not falter, you prove it. Start with Apple and Exxon and work your way down. Hint: It’s a ridiculous hypothetical that no one could prove either way.
First of all, I don’t accept that. But even if I did, who cares what “most companies” do. Your claim is that no CEO is worth 300x the pay of the average worker. Not one single CEO anywhere.
I can’t see what that has to do with whether or not any CEOs are worth 300x the pay of the average worker. That’s a different debate. You seem to think that if you can find some CEO somewhere who is not worth his pay that you have proven no CEO anywhere is worth his pay. Doesn’t work that way.
Propping up short term stock prices at the expense of long term company value, what could go wrong?
I am vaguely aware that some other countries have laws and corporate governance structures to try to prevent such examples of circle jerking, but the chances of them being implemented here are basically 0%.
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.
But the idea that all CEOs sit around rolling the dice and dodging responsibility is a cartoonish view not even worthy of debate. Some of us are trying to help the OP understand the economics of CEO pay. If he wants this to be just a CEO-bashfest, then fine. Let’s have the mods move this to the Pit and be done with it.
Want to make a bet on who can come up with more Fortune 500 CEOs dodging blame instead of accepting responsibility? Are you seriously suggesting the two are even remotely close?
I have no doubt you could find a few cases of it but it is not the norm for that group.
Clone may be not quite what I was going for. Imagine we make one billion copies of Warren Buffet. All with identical everything including experiences and knowledge. Do they all deserve to be billionaires? Or would happen that there would be a really sharp guy working in accounting who could do as well as the CEO? He just can’t because there are a finite number of jobs at that level.
I’m not going to find examples that undermine my point for you and of course someone will replace them. THAT IS THE POINT! Same as a lot of people can be a janitor so it does not pay a lot so too can a lot of people sit in the CEO’s chair. I am not saying any person can do it but that there are plenty who can.
I am sure there are examples of CEOs worth their weight in gold. Same as we have seen some truly outstanding generals and political leaders in the past. I maintain most of them are not outstanding and at best competent and do NOT deserve 300x the average salary. Those few standouts sure…they deserve it and maybe then some but they are a rare breed.
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!
