This may be true. However, I don't have any right to tell the owners of a
company what to do with their company any more than I have the right to tell my
neighbor what color of Christmas light to put up. The owners of the
company I work for can do what they want with their company and pay the CEO what
they choose - its their company.Besides, the CEO's salary has
nothing to do with my salary. If no company in the world is willing to pay me
more than I'm currently making - its because I don't add the value to
justify a higher wage.I could be lazy and demand the CEO make less
and I make more. Or, I could go gain skills that would demand a higher wage.Its all up to me.
In most big companies, the owners are stockholders. In light of this study,
let's demand our investment advisors and prospectuses publish the
compensation of the CEOs of the companies whose stocks they promote. Then we the
stockholders can make more informed decisions in buying or selling those stocks.
kiddsport,The SEC already mandates that executive compensation be
included in the filings of public companies. The info you request has been
available to you for years. Did you really not know that?
The salary of the chief executive of a large corporation is not a market award
for achievement. It is frequently in the nature of a warm personal gesture by
the individual to himself- John Kenneth Galbraith.
Hey Chris. I think a CEO pay has something to do with your income.
Aggie,If no CEO in the world is willing to pay me more than I am
currently making, it's because my skills don't merit a higher wage. It
doesn't matter if my CEO makes $1 a year or $1 billion. If no one will pay
me more its because I don't deserve more. The value I add is independent of
what my CEO makes. Just because a CEO could make less doesn't mean that
money saved should be divided amongst the other employees. People are paid what
the owners think they are worth and the excess profits or losses then go to the
owners. My value doesn't change whether my CEO makes little or a lot. Only a lazy person would think they deserve more than anyone is willing
to pay them.
Well, gee. We've been trying to tell you that for years.
So why don't we compare government salaries.The president makes
$400,000.00 a year, the representatives and senators make at least $174,000.00
and they are on track to lose us about 564 billion dollars this year and they
lost over a trillion dollars in 2009. Maybe if we paid them more, they
would only lose 1.4 billion dollars.Nah! They're playing with our
money, so who cares?I'd rather fire them all...
Re: adding value..."...A University of Utah study indicates that
some highly paid executives may actually decrease the value of their firms
through poor operation strategies...".Adding value?"...CEOs who receive higher incentive pay often lead their companies to
decreased financial performance...".Adding value?"...the highest paid CEOs earn significantly lower stock returns for up to
three years. Additionally, CEOs with an average compensation of more than $20
million were associated with an average yearly loss of $1.4 billion for their
firms...".Adding value?“...the highest paid
CEOs do a lot of things that are bad for the firm(s)...”.Adding value?"...there is a link between increased pay and
decreased financial performance...”.Adding value?"...not only does higher pay relate to a lower future stock price for the
company, it also predicted lower future accounting profitability...".Adding value?"...CEOs are fundamentally altering the
profitability of the firms in a negative fashion...”.Adding
What is even more head-shaking is that when CEOs are fired for running a company
into the red, they get generous golden parachutes and stock options. I agree
and disagree with Chris. Large corporations do have a right to pay what they
want, but it does affect the average employee therefore, the consumer.
Currently, average employees have had a flat pay for three decades now (when
adjusted for inflation) while CEO, upper management, and their investors have
seen exorbitant profits. Again, that is their right, but in a capitalist
economy where consumerism drives everything, that becomes a problem. Less money
for employees means fewer people purchasing goods, meaning layoffs and low wages
again leading to less money in the economy. It is a vicious spiral downwards.
Even Adam Smith in his Wealth of Nations warned of such a thing and talked of
corporate responsibility. Again, I agree with Chris in that the government
shouldn't regulate these companies, but I do think consumers need to wise
up and punish bad corporate behavior by not purchasing their goods and services
and instead, rewarding those companies that do right by their employees and
America as a country.
I agree with Chris B (well, on this. He is still wrong about BYU :). one issue that I was thinking is this: often companies that are in bad shape
can't attract a high profile CEO without paying them a lot, because in the
high likelihood that things go bad, that CEO's name will be associated with
it and soiled. So these guys charge a lot to take the risk - and often the
companies they are hired to fix still do poorly. So I agree somewhat with the
premise - CEOs can't on their own fix a company. If it is going badly, you
don't help by paying some jackwagon a bunch of money because odds are they
won't have an impact. Even the best captain, if hired AFTER the Titanic hit
the iceburg, would not be able to save the ship.
Can't help a chuckle here. If a CEO refuses to pay an employee more, it is
not necessarily because that employee needs to be more valuable. It is far more
likely it is because the CEO doesn't have any reason to pay more. Maybe it
is because the individual is willing to work for less than they are actually
worth. And, the CEO wants to keep costs down. Everyone knows the people who run
big companies are there because they are all powerful, all knowing, all
benevolent . . .
Chris you flipped your story around. I believe if a CEO gets to much, it
can affect the company. Which in turn makes it challenging to pay certain others
what they deserve. CEOs by ALL means are being over paid a lot of times.
The authors of these studies need to tell us how much money THEY make and why
they aren't rolling in the dough if they have all the answers.
Aggie,I've been consistent and continue to be. The deficiency
in your "logic" is that if CEO makes too much and can't afford to
pay others what they "deserve," where are all the other companies
willing to step up and after people what they "deserve." After all, if
I work for company A and my CEO makes too much but company B next door knows I
would add value to their company, then company B would be willing to pay me more
if I would make them more profitable. But when company A, company B, company C,
company D, company E, company F, company G, company H...(you get the idea) all
decline to offer me more money - its because they all came to the same
conclusion, that I wont add enough value to them to justify a higher wage.Quite simple really. Hope that helped you.
Chris. Here's the crux. I work for a fortune 100 company. I see how they
are cutting expenses, and just about anything possible to keep there stock
buddies on Wall Street happy. Those cuts include my commission dollars. But the
CEO pay went up. There's no way a CEO is worth 20-75 million a year.
It's not sustainable. Robbing peter to pay Paul isn't working.