Yahoo: It’s Good to Be the King: CEO Pay Up Big 2010, Not So Much For the Average Worker

[SnyderShrugged]

They don't directly set their own compensation but they indirectly do. The less they pay their employees, the more profit the company makes, the higher the stock price, and the more they get compensated.

Profit would seem like the correct goal but it is really just short term profit they are being rewarded for. That's why they all have their golden parachutes. They come in, get their quick profit by only focusing on the short term, then they move on.

If an employer underpays their employees, they will leave to go to one that doesnt. if they did what you claim as far as coming in, making their cash then skipping out, I assure you they wouldnt have many more offers in the future

Their wages are negotiated well in advance, they know their compensation figures going in as does the company that hires them.

---------- Post added April-13th-2011 at 12:50 PM ----------

Actually, companies offer CEOs golden parachutes for a variety of reasons. Some companies offer golden parachutes to CEOs as part of their antitakeover defenses. The idea is that potential hostile acquirers will be potentially dissuaded from acquiring a target company if it has provided top officers with golden parachutes upon a change of control transaction.

edited for brevity

great post!

---------- Post added April-13th-2011 at 12:52 PM ----------

No, what I said was " Being expected to work "extra" time on a regular basis is not part of the typical salaried employees comp plan." I never said it was now "the norm". And I never said people are "regularly expected to go beyond whats necessary". I believe it's you making the errant claims.

please show where I made those claims. I've done nothing but challenge those claims here today

Yeah, that'll work. The old "Pursue Legal Action". Pretty much the definition of a CLM not only where currently employed but potentially at future employers.

yet, your opinion doesnt change the fact that I was 100% correct.

---------- Post added April-13th-2011 at 12:53 PM ----------

When you can collect tens of millions and even more for getting canned, who needs job security?

~Bang

the Golden parachute itself is a form of pre-negotiated security to entice a prospective CEO.

---------- Post added April-13th-2011 at 12:54 PM ----------

and the real question as it has been debated here hasn't been

what do you do if "...you don't like what the CEO of your company makes and think you should earn more...? "

it could be better described as:

what do you do if ".... you don't like what the CEO of the company YOU HAVE INVESTED IN makes, and you think more of the profits should go to share holders... ?"

given the current cabal of board directors, there really isn't an alternative in listed corporations... they are all paid obscenely by the same failed compensation scheme models.

whats your solution, and would it be applied to 100% of all workers, regardless of level in the company?

[Henry]

Snyder ...

Your average worker is being asked to put in more hours, do more work, cover the shifts of laid off workers etc etc....workers limits are being pushed, yet their resolve is actually raising productivity in the company, but is this getting them raises or bonuses? Nope. Who is reaping the rewards? The CEOs.

Today's over-stretched worker is basically what is expected of tomorrow's worker.

Your response was this:

We have a 40 hr work week and overtime rules in place federally. What instances are workers being asked to exceed those limits without just compensation and what specific companies are engaging it it without ramifications legally? While I understand your perspective and even why you might believe this to be true, I also think its mainly hyperbole.

When it was answered that the 40 hr work week and overtime rules are regularly circumvented, your response was:

It comes with the territory for a salary role and that expectation is assumed in the salary figures. Salaried staff also get paid when they do not work as well. If its an hourly role, they get overtime.

You are kinda destroying your first point with your second one. If salaried workers are being asked to produce more and not getting compensated more, then NoCalMike's point is valid. Your claim that 'the 40 hour work week and overtime rules don't apply to salaried workers' renders your 'there is a 40 hour work week and overtime rules in place' counter irrelevant.

[SnyderShrugged]

Snyder ...

Your response was this:

When it was answered that the 40 hr work week and overtime rules are regularly circumvented, your response was:

You are kinda destroying your first point with your second one. If salaried workers are being asked to produce more and not getting compensated more, then NoCalMike's point is valid. Your claim that 'the 40 hour work week and overtime rules don't apply to salaried workers' renders your 'there is a 40 hour work week and overtime rules in place' counter irrelevant.

Not really, since those discussions were specific to each type of employment. It's entirely accurate.

salary= expectation of what is often termed as "casual overtime" (I call it mandatoryvoluntary OT)

Hourly= if expectation of overtime is present, then they will be compensated via overtime pay rules.

[Goskinz0721]

please show where I made those claims. I've done nothing but challenge those claims here today

I never said you made those claims. You twisted my words by misquoting me and then stated that I was making errant claims. Whle it was actually you making the errant claims by misquoting me. I'm done with you.

yet, your opinion doesnt change the fact that I was 100% correct

Whatever. Let me know what your children say when you give them that advice to "pursue legal action". You're disconnected from the real world. Again, I'm done with you.

[SnyderShrugged]

I never said you made those claims. You twisted my words by misquoting me and then stated that I was making errant claims. Whle it was actually you making the errant claims by misquoting me. I'm done with you.

Whatever. Let me know what your children say when you give them that advice to "pursue legal action". You're disconnected from the real world. Again, I'm done with you.

No reason to get so upset.

Apologies for offending you

[mistertim]

If an employer underpays their employees, they will leave to go to one that doesnt.

The problem with this statement is that it bears little resemblance to reality. Yes, in RandLand or some other Libertarian Utopia your statement would definitely be the case; but we're living in the real world. With the job market still trying to work its way out of the sewer as well as the additional threat of more and more jobs moving overseas, the idea that your average employee can or will just up and leave one job that in the hopes of finding a new job if they feel they aren't getting paid enough is generally ridiculous.

People have families to take care of, etc and with jobs moving overseas and the market for their services being generally crappy in most places they end up having to stick with a job that doesn't pay them what they're worth but at least gives some type of job security. Unless they want to risk being unemployed for a long time while they try to find a job and just hope that they have enough saved up to pay bills and feed their family. And yes you can look for another job while working at your current one but I've known more than a couple people who's current employers found out and they were suddenly without a job.

Companies know all of this perfectly well, which is why they can generally cut jobs and then have people do more and more work for the same money without having to worry too much about it. "Don't like your salary or having to work on this extra stuff now? The door is over there; there are plenty of people who would like your job". AKA "You are expendable. Complain and we'll just get rid of you, but we aren't actually going to say that out loud".

[SnyderShrugged]

The problem with this statement is that it bears little resemblance to reality. Yes, in RandLand or some other Libertarian Utopia your statement would definitely be the case; but we're living in the real world. With the job market still trying to work its way out of the sewer as well as the additional threat of more and more jobs moving overseas, the idea that your average employee can or will just up and leave one job that in the hopes of finding a new job if they feel they aren't getting paid enough is generally ridiculous.

People have families to take care of, etc and with jobs moving overseas and the market for their services being generally crappy in most places they end up having to stick with a job that doesn't pay them what they're worth but at least gives some type of job security. Unless they want to risk being unemployed for a long time while they try to find a job and just hope that they have enough saved up to pay bills and feed their family. And yes you can look for another job while working at your current one but I've known more than a couple people who's current employers found out and they were suddenly without a job.

Companies know all of this perfectly well, which is why they can generally cut jobs and then have people do more and more work for the same money without having to worry too much about it. "Don't like your salary or having to work on this extra stuff now? The door is over there; there are plenty of people who would like your job". AKA "You are expendable. Complain and we'll just get rid of you, but we aren't actually going to say that out loud".

despite all this lamenting about how unappealing it is, it still doesnt change the fact that if you are unhappy with an employer, then you are very free to find another one.

We all do, all the time. I have had to a few times. It sucks, but life does that at times.

Thats the "real world" my friend

[Predicto]

I have no problem with the founders of businesses making enormous, obscene, Scrooge McDuck amounts of money. More power to them. Entrepeneurship is awesome.

But that is not what we are talking about. We are talking about the hired MBA executive class at the top echelon of virtually every publicly traded company. Those guys are grossly overpaid because they set their own pay (or set each other's pay) and are richly rewarded for all the wrong reasons. Because of the archaic way corporations are governed, there is no practical way to control them. Meanwhile, workers' pay lags further and further behind (with the final goal for each corporation seemingly being to make sure that the average American worker-serf takes home the same pay that they make in the poorest district of China or Bangledesh).

If I had easy answer I would provide it, but I don't. Doesn't mean that there isn't a genuine problem.

[Hubbs]

It sucks for anyone but them. But again I must ask why should I be personally worried about CEO pay? The top one percent consists of many more people than CEOs and the CEOs I've worked with certainly earn their wage.

I think income disparity is a topic worthy of discussion but I don't believe CEO pay is the root of the problem. Like it or not someone has to run a company and its not anyone's business but the company's how much they choose to pay them

I will add a caveat however, the only scenario where I might be convinced that oversight of another mans wage is appropriate would be where that CEO is leading a failing company that goes on to take corporate welfare to maintain a false portrait of profitability. Heck, Id even be irked if it were a profitable company taking federal largesse

You should be worried because the first graph is directly related to this:

When an economy expands and prices inflate for thirty years while average wages remain stagnant, the only way for the vast majority of the populace - who are the vast majority of consumers - to keep up is through an ever-expanding debt load. You run into two major problems when you play that game. One, when it's played for thirty years, a larger and larger "hangover" is created that hits harder every time the limits of each round of easier debt are reached. Two, mathematically, you can only play so many times, and we're just about out of turns.

You shouldn't be worried about any single CEO's pay. You should be worried about the creation of imbalances across the entire economy. The income gap is one of those imbalances.

[SnyderShrugged]

Hubbs, I understand all that, and I appreciate that you werent discussing individual CEO compensation (I was quite surprised when I thought thats what you meant, especially knowing your beliefs in general)

That said, There isnt really anything that can be done if a company chooses to pay their CEO's very high. It's simply not anyones choice but theirs and they are free to pay whatever amount they desire to attract their candidate.

I also mentioned early in the thread that the top 1% isnt only made up of CEO's. There are plenty of others who are in that group.

Since I respect you so highly, I would really like to hear how you think this issue could be addressed without infringing upon the liberty of any individual. Personally, I dont see how that could even begin to occur though, but I promise that I'll listen

[LadySkinsFan]

Here's real world: son-in-law (SIL) was making $50K two years ago. Was lucky enough to train his replacement, a Southern Asian Indian, and was promptly laid off. He received a package for 4 weeks severance. Was on unemployment until this Jan. because he never got an answer to all the resumes he sent out etc., making $9/hour through a temp agency that is paid $20/hour for his services. No benefits either. Good thing my daughter got a job for $13/hour after a couple of promotions and subsequent raises. They get to support themselves and a daughter in a southern state where rent is lots cheaper than here in DC. She gets benefits.

This economy sucks right now and corporations and rich people are not doing their part to help out. It's a proven fact that workers pay more percentage of income tax than the rich due to exemptions that aren't available to those who work for others. Rich are more likely to have passive income taxed at capital gains rates and to be incorporated so they can pass expenses through their company. The average working person does not have access to that system.

[Tulane Skins Fan]

If I had easy answer I would provide it, but I don't. Doesn't mean that there isn't a genuine problem.

How about raise income taxes on the rich, and make it coincide with tax deductions for payments made to employees. :paranoid:

[LadySkinsFan]

How about raise income taxes on the rich, and make it coincide with tax deductions for payments made to employees. :paranoid:

They already get deductions for pay for employees. Salaries, benefits, hourly wages are tax deductible from a corporation's tax liablility.

[Tulane Skins Fan]

They already get deductions for pay for employees. Salaries, benefits, hourly wages are tax deductible from a corporation's tax liablility.

You're right... close all these tax loopholes!

[Henry]

Not really, since those discussions were specific to each type of employment. It's entirely accurate.

salary= expectation of what is often termed as "casual overtime" (I call it mandatoryvoluntary OT)

Hourly= if expectation of overtime is present, then they will be compensated via overtime pay rules.

NoCalMike: People are expected to work harder and longer for the same pay

SnyderShrugged: There are laws in place to prevent that.

NCM: Not in this example ...

Other Posters: Not in this example ...

SS: Well those are salaried positions.

----

Sorry. I'm sensing a large disconnect in this discussion.

[mcsluggo]

If an employer underpays their employees, they will leave to go to one that doesnt. if they did what you claim as far as coming in, making their cash then skipping out, I assure you they wouldnt have many more offers in the future

Their wages are negotiated well in advance, they know their compensation figures going in as does the company that hires them.

---------- Post added April-13th-2011 at 12:50 PM ----------

great post!

---------- Post added April-13th-2011 at 12:52 PM ----------

---------- Post added April-13th-2011 at 12:53 PM ----------

the Golden parachute itself is a form of pre-negotiated security to entice a prospective CEO.

---------- Post added April-13th-2011 at 12:54 PM ----------

whats your solution, and would it be applied to 100% of all workers, regardless of level in the company?

i am not sure of the solution.. that is not the same as recognizing a problem.

whatever solution would NOT need to be applied universally, just in instances where there is an inadequate market structure: The supply, demand, conditions for entry/exit, availability of information keeps the market for plumbers an efficient and smoothly operating machine. I can't argue the same for the "market for CEOs".

Furthermore.... although similar inbreeding problems undoubtably also lead to market imperfections in the "market for A-list movie stars", or "directors for A-level hollywood movies," or other areas where individuals are paid obscen salaries.... i worry about those markets much less than the market for CEOs

EVERY single us company has a ceo. Their compensation packages are awful enough to scew actual business operations toward meaningless short-term gain at the expense of the long term health of the corporation (and country). This is a BIG deal, i think.

[Bootleg]

I thought this was a capitalist country.

[greenspandan]

I thought this was a capitalist country.

"capitalism" doesn't mean allowing the rich to run roughshod over the poor with no restrictions whatsoever. why would anyone want to live in such a state?

[Bootleg]

"capitalism" doesn't mean allowing the rich to run roughshod over the poor with no restrictions whatsoever. why would anyone want to live in such a state?

That's a lot of hyperbole. If the "poor" don't like it, then they should work their way up to CEO status themselves.

The reason these type of stories are so controversial has everything to do with jealousy and entitlement.

[TheGoodBits]

That's a lot of hyperbole. If the "poor" don't like it, then they should work their way up to CEO status themselves.

The reason these type of stories are so controversial has everything to do with jealousy and entitlement.

That's the brainwashing talking buddy. Those elite have managed to convince you of that load of crap at the same time they create barriers to upward social mobility.

[Bootleg]

That's the brainwashing talking buddy. Those elite have managed to convince you of that load of crap at the same time they create barriers to upward social mobility.

Let's take a look at #1 CEO at Viacom.

Phillipe Dauman

- Son of a photographer, got a 1600 on SAT, went to law school at Columbia, and so on.

#2

Ray Irani

- GRADUATED college at age 18.

- Immigrated to USA and began graduate school at age 18.

#3

Larry Ellison

- FOUNDED his own company.

- Son of middle class parents.

Hmmm, yeah these people never worked for anything. It's a good thing they were in the circle of "good old boys".

[SnyderShrugged]

i am not sure of the solution.. that is not the same as recognizing a problem.

whatever solution would NOT need to be applied universally, just in instances where there is an inadequate market structure: The supply, demand, conditions for entry/exit, availability of information keeps the market for plumbers an efficient and smoothly operating machine. I can't argue the same for the "market for CEOs".

Furthermore.... although similar inbreeding problems undoubtably also lead to market imperfections in the "market for A-list movie stars", or "directors for A-level hollywood movies," or other areas where individuals are paid obscen salaries.... i worry about those markets much less than the market for CEOs

EVERY single us company has a ceo. Their compensation packages are awful enough to scew actual business operations toward meaningless short-term gain at the expense of the long term health of the corporation (and country). This is a BIG deal, i think.

I appreciate. Your post in its honesty and tone.

A couple of thingss on my mind after reading it.

I don't think that any solution that doesn't address the whole upper 1 percent could work on what many here feel is the root problem of income disparity. I also would need to see whatever rules are created having to beequal for every individual. Otherwise. It could become just a political move.

[December90]

That's a lot of hyperbole. If the "poor" don't like it, then they should work their way up to CEO status themselves.

The reason these type of stories are so controversial has everything to do with jealousy and entitlement.

That's the brainwashing talking buddy. Those elite have managed to convince you of that load of crap at the same time they create barriers to upward social mobility.

Brainwashed to believe that people should be able to keep more of what they have earned and that one should not have to pay a greater proportion simply because they have the means.

I reject the whole notion of "From those according to their ability, to those according to their needs" as punishing the industrious to supplement for the non-productive members of society is not an ideal I embrace. I don't believe in equal outcomes for the sake of equal outcomes.

[Burgold]

Are you implying that the people that work under those CEO's don't work hard or sometimes even harder? There's a famous quote from a really successful businessman who when asked how he got to be rich, he answered, "I hired a lot of smart people" No one gets there alone. No one rises entirely on their own steam. The question within this thread is whether CEO's are benefitting and abusing the little guys. There is a growing wealth disparity. That's undeniable. Strangely, there seem to be a lot of CEO raises even when the corporations are losing money, slashing payroll, or even on the verge of going into bankruptsy.

If the corporation succeeds the CEO deserves to benefit from that, after all, he's the captain of the ship, but that doesn't mean the guys shoveling coal didn't make the ship go.

[greenspandan]

That's a lot of hyperbole. If the "poor" don't like it, then they should work their way up to CEO status themselves.

hahaha yeah man. the solution to the problem of poverty is all the poor people should get rich! what a well-thought-out ideology.