So you said that it would be fair to decrease CEO pay and distribute it to the workers. You cited a bunch of stats that would support this argument. I disagreed. I said why. You challenged me on my view. I defended it. Face it, you expressed an opinion, not an entirely objective statement.
Didn’t we go through this on another thread?
BTW, I am not getting into another argument over what the adebate is and who is debating what. Clarify your position if you like, but let’s not debate debating debates.
My position: CEO pay is the business of the CEo and shareholders. Redistribution of wealth within a corporation is ncounter to free market and will not result in significant pay increase.
As a free market advocate, I am opposed to the idea of taking from those who have thru their own efforts and ambitions risen to the top, and then distributing the fruit of their efforts to the masses. Last time I checked, the great experiment started in 1917 hasn’t endured to any great success…while our system even with the inequties has in fact prospered. If the shareholders of ANY particular company feels their guy is worth megabucks, that is THEIR decision alone. My opinion or yours doesn’t make one twit of a difference. The “man” works for them and IMHO the opinion rests wsith those whose hard earned (at least in some cases) dollars are invested (thus at risk) are the only ones who have the right to differ. As a stockholder in several companies (its an IRA, OK?), I am constantly given the opportunity to voice my opinion in the decisions, including corporate compension, in the running of the companies I am invested in. My voice admittedly is minescule at best, but it is a voice nonetheless. I have NEVER voted in favor of the “golden parachute” that many of the executives have recieved, but I did at least have an opinion registered.
I humbly submit that if you do NOT have your hard earned dollars invested in GM or whatever, then you have NO RIGHT in suggesting that the GM CEO or any other officer is paid too highly. If you do, then I am more than glad to listen to your complaint (noting of course I can do nothing other than lend a sympathetic ear ).
The problem is that your voice (or any individual stockholder’s voice) is actually less than miniscule for most companies. So much stock is now held by insurance companies and other “trust type” funds that even if thousands of shareholders banded together, for most companies they could not make any changes to the board.
The laws at the turn of the 19th/20th centuries stipulated that companies could not have interlocking directorates. For a while that worked. Now the boards have interlocking athletic clubs. The guys making the decisions to hire, fire, and compensate corporate officers do not bother to exercise actual oversight because they are often officers of companies, themselves. The mentality is that if they get tough as directors, their own directors could get tough with them. No one seems to want to be in the first group to get tough and trigger a chain reaction that would lead to all of them having their compensation reduced.
The actual funding (stock ownership) is handled by huge institutions with some corporate bureaucrat directing the stock votes. They have developed a “not broke don’t fix it” attitude. This would be admirable in its restraint to not interfere with the daily operations of the companies, except that it actually amounts to letting the boards do whatever they want with no accountability. As long as the bull market keeps the insurance funding stable, the insurance companies do not want their stock-watchers rocking the boat. Since the insurance company stock-watchers are the ones who hold the actual votes for the boards of directors, there is no genuine chance for a stockholder revolt.
This is not an example of the “free market” setting the compensation levels. There is no competition in that arena. The boards are not held accountable by their institutional funders. The officers are not held accountable by the directors.
Note that the greatest upsurge in CEO compensation has occurred in the last ten years. Have companies suddenly become truly 5 and 10 (and 40) times more efficient and profitable in that period of time to justify those sorts of raises for the officers? No. They have tended to become more efficient and profitable, but not by those figures. Rather, what has happened in the last ten years is that the institutional stockholders have surrendered their responsibility to the boards, lulled by the security of the bull market.
(I have not found any real numbers on compensation, yet, although I note that the 400× figure appears to be anecdotal, itself. Lots of sites refer to it, but no one indicates the source of the information or the statistical method used to arrive at the figure. The figure bandied about in the early 1990’s was 140× to 160×, so figuring that those numbers were computed the same way, it would appear that CEO salaries have increased about 2 1/2× in the last eight to ten years. I would still like to see some genuine information, however, rather than unsupported numbers.
I do believe that CEOs and their buddies at the top are overcompensated; I am simply not sure that the 400× figure is accurate. When the revolution comes, I wouldn’t want them guillotined over an incorrect number.)
You may be right. Both the Wall Street Journal online and the AFLCIO site (that oft quoted duo) mention the figures, and both attribute them to Business Week, but no one seems to have the actual study. I first read it in Business week and assumed it was their study, but they may have just been referencing it as well.
In any case, if the revolution does come I’d like to think they’ll be executing Eisner over Dinosaurs and not his salary.
No. Really, no. I quoted the numbers; I never said or implied anything about fairness. ‘Fairness’, in my opinion, is a strictly emotive term lacking any practical meaning. I don’t and wasn’t promoting external redistribution of corporate pay. I do think salary structures are somewhat arbitrary and inefficient, but that’s just an opinion, and I don’t expect you to care any more than I care about your opinions, which is all you’ve offered.
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My position: You can’t see past the end of your nose.
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