some ideas about how to offer "founder incentives" in workers cooperatives."
From a recent HN comment: https://news.ycombinator.com/item?id=37304911
But worker cooperatives is known as "one worker, one vote" and anarcho syndicalists like Richard Wolff wouldn't consider that a worker cooperative anymore.
But also, Kasmir seems to be faulting co-op members for some lack of ideological purity, and frankly, for failing to live up to the aspirations that others have built around them, which aren't their responsibility.
> Many academics and social justice activists alike — maintain that co-ops promise a more democratic and just form of capitalism and even sow the seeds of socialism within capitalist society.
> Co-op members voted to pursue an international strategy to open these firms, and, thus, to employ low-wage laborers. Hence, we are confronted with a complicated permutation of a familiar state of affairs whereby the privilege of one strata of workers depends upon the exploitation of another.
> Compared with workers in the standard firm, co-op members were less involved in and showed less solidarity with the Basque labor movement, which at the time was part of an active leftist coalition for socialism and independence for the Basque country.
But the point of a co-op is not to further the goals of academics and activists, nor is it the responsibility of any co-op to maintain allegiance to whatever movements or institutions that the author admires. If Richard Wolff wants people to vote in the workplace, and wants those votes to mean something, doesn't that power and autonomy also necessarily mean they have the power to disagree with his views and pursue their own success and flourishing? And its success should be measured by the degree to which co-op members benefit, not by the extent that they're an ideological tool for outsiders.
Yes, one might have wanted Mondragon co-ops to create other worker-run co-ops in other countries, rather than subsidiaries. But it's hard to see how that would have actually worked. Frankly, starting factories in China by talking to workers about how important democracy is could have gotten people hurt. And these firms do still need to be able to compete and succeed in a global marketplace in which most of their peers are operating from a purely capitalist playbook. If you draw your ultra-orthodox definition of what a co-op too narrowly, you risk adopting a definition which excludes successful firms of any significant scale.
I've been in and started several worker cooperative businesses. I don't try to do it anymore because of what I perceive as a fundamental issue: the people that are the most explicitly attracted to worker co-ops are also the least business saavy or willing to put the business's existence ahead of ideological values. In my experience, it is a recipe for almost certain failure.
In the same way that anarchists point to Revolutionary Catalonia, workplace socialists point toward Mondragon, ignoring that these are both statistical aberrations rather than the normal state of affairs. The normal state of affairs is a bunch of naive ideologues that hand-wave away planning critical details. This isn't unique to worker co-ops; founders do it all the time, but the difference is that new ventures require flexibility and leanness, but worker-co-ops are exceptionally rigid and fragile.
Generally if worker co-ops "succeed" it's directly because they are being subsidized by similar ideologues rather than business efficiency. The actual product they sell is good feelings rather than products or services.
My funniest attempt involved 2 friends of mine who are both in a league of their own in their field. both of them kept sticking their nose in what the other was doing endlessly moaning that it couldn't be done. Eventually they just got angry that some noob would question their expertise.
It's a little weird that tech-folk are generally ok with the idea that groups can yield good predictions in the context of a non-owner community that is harnessed to improve a product, or in the context of a prediction-market, where people placing bets in disagreement can lead to a more accurate outcome than the participants taken separately would produce -- but somehow think this mechanism will fall apart if workers who have an interest in a firm's ongoing revenue are able to vote.
There is also the thrill of making something happen together. Like barn raising with 200 people is quite different from building a shed alone.
> On September 14, the contract between the United Auto Workers and the Big Three carmakers (GM, Ford and Stellantis) is expiring — and the possibility of a strike is real. This comes at a delicate time for multiple reasons. The labor market is tight, which means workers have other options. Inflation is high. And the auto industry is undergoing a major shift to the electric vehicle market, which may change the composition and pay of the labor force. The stakes are high. So what does the union want and how does it fit into the goals of the broader labor market? To understand more, we speak with Dan Vicente, the director of UAW Region 9, as well as Alex Press, a labor reporter at Jacobin magazine.
There were some items that the unions conceded in 2008 when the US automakers were going bankrupt that have still have not been restored.
When they get it - right now every reports that they are asking for 40%
TFA conveniently points out to you that 20% has been offered to them and was rejected.
Also they are asking for more than pay raises and shortened work week. They're also demanding health benefits for retirees and defined benefit pensions among other things.
The only defined benefit plan left is social security , which is fast going into insolvency in exactly a decade, and where it will automatically be cut 25% once that happens!
My point remains, to be in support of defined benefits, you must not be OK with unilaterally changing the de-facto definion of defined-benefit for SS?
How is it OK to literally pull the rug under people that paid - all their lifes - with the promise to get X on retirement, and will now get X-Y instead ?
The exact figure is 77.5%
Are they? When concessions are given they should also be removed: there are some elements in the contracts that date back to the hard times of 2008 that the unions are still putting up with.
40% is table stakes.
Why has the supply of CEOs not kept up with the demand for them? Surely, with the improvement in education and in increase in MBA programs, there must be far more CEOs today than in 1978. Why has the ratio of CEOs to Companies fallen by 14x for their wages to rise this much? /s
As many argue, wages are only set by supply and demand. And if workers are underpaid, then it is because they are replaceable. Use the same framework to explain CEO pay.
Most of the time that I see people invoke "Econ 101" concepts, they are wrong. Supply and demand does not account for the power imbalance between workers and leadership, which unions specifically attempt to address. It does not account for the class differences between workers trying to make ends meet and the board of directors who believe they deserve much higher pay than workers. We are free to change the perceived value of workers through the power of worker solidarity - ensuring that individual workers are not so easily replaced to keep wages suppressed. You can simply say "it's supply and demand" and do nothing to support the workers whose labor is so clearly needed for our economy to function, or we can support collective bargaining rights to make sure that individual workers are not crushed under the power of company leadership. How you view this is up to you, and not a simple fact of natural laws of economics.
Demand isn't the same thing as value. When we create an economy where a few people have all of the disposable income then we also create one where the only business interests represented are theirs. We should let value dictate demand, which only happens when we spread the money around.
It's not that supply and demand is wrong. It's that supply and demand is not the whole story. It is an open question whether workers should change the market forces at play by unionizing and demanding collective bargaining of their wages. This does not subvert supply and demand, it simply alters the pressures the company leadership experiences in the market. I said that the original comment was "wrong" because the comment stated clearly that "wages are only set by supply and demand". This seemed to me to imply that nothing could be done about low worker wages, which is clearly wrong. What workers can do, and apparently in this situation have done, is unionize and strike for better wages.
If supply and demand worked as theorized in the labor market then there would necessarily be a loss of employment when the minimum wage is raised, but that is not always the case .
Some studies find effects and some don't, which is a good indication that the labor market is more complicated than Econ 101 principles.
It seems to me that what the union is asking for is that the corporation act more like a benevolent force than one that is restricted by market pressures. Of course, you could use the power of government as one poster mentioned to force this issue, but those violent delights have violent ends.
I disagree. The union is simply changing the market pressures that the corporation experiences. There is no benevolence required when you are faced with a strike. You either negotiate acceptable terms, or you have to deal with the consequences.
Do you feel this to be illegitimate? If so, why?
If someone's selling you a simple explanation, they're likely wrong.
Wouldn’t that be simply favouritism/cronyism rather than a free market?
See "A Principled Approach to Executive Pay", Chapter 1.F in The Essays of Warren Buffet, arranged by Cunningham.
The issue I take with your line of reasoning is that executive compensation is often at odds with investor interests in more ways than just its amount. Buffet describes "heads I win, tails you lose" executive compensation plans in an essay from the 80s/90s. He describes how they do things at Berkshire Hathaway - they're doing very well and I doubt have any issue recruiting good executives.
Despite this, and decades later, we see terrible compensation plans being approved by boards. We see executives exiting failed businesses with enormous paychecks. We see boards offering those same executives new management positions with terrible (for investors) compensation plans. What gives?
It certainly looks like cronyism to me, but maybe I ought to be applying Hanlon's Razor.
The farther actors are from perfect information, the more asymmetry in the system there is, the slower the system is to react, the more the relationship between supply and demand breaks down.
Yes, it does, in each scenario you presented.
> We are free to change the perceived value of workers through the power of worker solidarity
It's more like using the power of government to ensure the company has no alternative to the union.
Company leaders have no actual power over the workers. They cannot force anyone to come to work. They cannot have you arrested. They cannot confiscate your property. They cannot beat you. They cannot prevent you from accepting a job at another company. They cannot prevent you from leaving. They cannot extort, libel, slander, blackmail, or threaten you. They cannot put a hit on you.
All they can do is offer you money in exchange for your labor. That's it.
They can totally do that with a non-compete clause. Just not in California.
In some states, and in some circumstances, they may be able to prevent you from accepting a job at a competitive company.
Unions absolutely do not need the government to exist. It is only through government attempts to control and curtail unions that the government has involved itself in unions.
See for example the Taft-Hartley act:
That's absolutely correct. But in America, the unions use the government to tilt the balance heavily in their favor.
You’re both right. Power dynamics and supply and demand are interrelated.
Most forms of human organization involve hierarchy. Even co-ops have a CEO and that CEO makes a multiple of base worker pay.
What that multiple is and how it gets decided is a fair question: in co-ops, voting rights are built-in, but for private corporations you need collective bargaining
This is a description of the status quo of capitalist competition, but is not a fact of nature. We can arrange our economies to work in cooperation with one another, rather than in competition. Competition is used specifically to depress all worker wages for the benefit of the ownership class, and we do not have to accept that at face value.
It's not that they're wrong. Worse, they're thought-stopping.
They're mantras we all know and we are trained to "accept their wisdom" and stop questioning.
Supply and demand is the imbalance. The workers, individually have no control over supply. The whole point of a union is to control the supply of labour and shift the balance of power.
There was an example in Money Stuff this week where a CEO got a pay package "worth $110 million". It's actually made of stock options that vest if the share price went above $150, but the expected value was $110 million so that's what was reported.
…But the share price only reached $66. So in fact he was paid zero, and he quit. (Well, $1.5 million in cash.)
> paid $1.5 million in cash
These are two wildly different things.
If its $1.5M in a single year, I have absolutely no tears to shed.
If that was 5 years, that's $300k/yr in compensation. A very comfortable salary in just about every place in the country. Once again, I probably have no tears.
If that was 10 years, that's $150k/yr. Ok, if you're expected to live in Manhattan or whatever, I'll agree that's pretty tight. Still though, that's a couple times the average household income in the US. Congratulations on being a bit closer to a plebeian. Boo hoo, guy who could have had generational wealth just had to live like the rest of us. What a tragedy. Truly zero income, being more than twice the average household income for a single earner without even thinking of other compensation he might have received.
I can't imagine this was some kind of performance pay over 15-20 years, so his pay has to be in this. I don't have a WSJ subscription, so I can't comment further on it.
It gets a little weirder than that I suppose since you might have a great deal of shares in a company, which you never exercise so you could say that money doesn't really exist until exercised.
You can however use those shares as collateral for a mortgage or other line of credit which is a pretty common tactic for wealthy people to avoid paying income tax that they otherwise would if they were to sell said shares.
> You can however use those shares as collateral
Only shares that you own, not have an option to buy. And only a portion of the shares, and if your shares become worth less than the loan, you still owe the money, and they'll come after any other assets you have.
> you might have a great deal of shares in a company, which you never exercise
You're confusing owning shares with having an option to buy shares. They're very different. You'll also owe income tax on the difference between the exercise price and the current price of the shares. (A friend of mine didn't know that, and consequently lost his house.)
I'm fairly sure I could achieve the same results for considerably less.
Moreover making compensation dependent on stock price movement encourages corruption and fraud - look at the numerous Enrons and other financial claims. All of which left the majority of those responsible enriched while destroying the lives of others.
I'm highly skeptical of that. Not driving the company value to zero is worth a significant amount of money; anyone who has worked under a bad executive or CEO can tell the difference between one that didn't accomplish aggressive goals and one that's objectively bad. If you have a bunch of executive experience, maybe you'd be able to replicate that CEO's performance, but absent that it's more likely you'd cause more harm than just not making the goal.
I doubt this is true. Organisations have inertia, and getting one to change direction or do something different is remarkably difficult. (source: I have been hired as a CEO to change the direction of an organisation. It was difficult).
I strongly suspect that an average person being put into the CEO role would do fine as long as the organisation was basically OK. They'd make mistakes, sure, but everyone makes mistakes. The organisation has ways of limiting the damage of mistakes.
The hard bit about being CEO is taking full responsibility for your decisions with no feedback. You can deal with this in a wide variety of ways; arrogance, narcissism, authoritarianism, or humility, honesty, and teamwork. We tend to see the first three because those kinds of personalities cope well with this kind of difficulty. But that doesn't mean this is the best way to deal with it.
Performance based bonuses exist at virtually all levels of skill in companies. What you see as a catalyst for fraud could also be framed as a catalyst for incentivizing an outcome most likely achieved via hard/smart work.
$1.5M is not nothing, but it's less than 1% of the CEOs potential compensation.
Home Depot? UPS? Amazon's 1.6M, not just those in Seattle making well into the six figures? Kroger? Albertsons? Target? Starbucks? You really think a bagger or cart grabber or barista is getting a performance-based bonus? These are some of the largest employers in the US.
The vast majority of the US workforce probably has less than 10% of their income (probably close to 0%) directly tied to performance. A massive chunk is entirely how many hours they get on the clock, that's it.
> Performance based bonuses exist at virtually all levels of skill in companies
This really sounds like the perspective from someone who's never punched a clock.
lol. Any data on that? In tech maybe, but I'm fairly confident(also an unsourced opinion) that the vast majority of workers in the US receive zero bonus, skill based or otherwise
How many companies really break that relationship in their market sector?
So tldr, ceo pay is based on the economic cycle rather than how the company does.
On average, 50/50 is a pretty decent benchmark here.
Steve Jobs, Bill Gates, Elon Musk, Satya Nadella, etc.
> ceo pay is based on the economic cycle rather than how the company does
You can always start your own corporation, name yourself CEO (all you gotta do is file some paperwork and pay an annual fee) and rake in the dough for doing nothing!!
I've seen this in my career, the closer I get to "SRE" or "platform engineer" the more decoupled my salary has become from my actual measurable value.
I'd articulate the thinking as, roughly:
We know this role is important. We know that having a bad SRE team (or CEO or platform team) is expensive, it could cost us the 100% of the business. And we don't know how to measure the value a good one provides. Therefore we are willing to spend as much as we can afford to make sure we get a good one.
The elite/ownership/"capitalism winner" class are playing on an entirely different level with their power and influence. Don't kid yourself into drawing comparisons with your situation and miniscule in comparison compensation. It's always heads they win, tails you lose.
There are two ways to read my comment.
One as explaining CEO salaries.
The other as actionable career advice for negotiating your own salary.
I've used this insight to nearly 5x my salary.
That salary was not minuscule to me.
(Competition between the two players in the market that have a revolving door of executives, a carefully crafted moat a mile wide, and raise prices together in lock-step but definitely do not collude, no sir!)
The difference is that the people who decide to pay the CEO so much are the ones who made the money (the company owners), it's their money to spend how they see fit. In the government it's not people spending their own money, they're spending other people's money that they obtained through the threat of jail for those who don't pay it.
In the case hiring, in a tight labor market, there are more open roles than people, so the companies that want a particular hire, or value experience in that role, need to pay more to secure the candidate. And those that don't, end up with roles that aren't filled. In a market with more labor, then the firm has its pick of candidates, and can make lower offers, secure in the fact it probably will get a bite from a candidate with fewer options.
It works that way with oil, or hog futures, or my corner bodega's sandwich prices.
This is pretty much it. Everyone wants to avoid hiring a bad CEO so it’s a bidding war for executives with track records at large companies.
And when you’re making billions a year the CEO compensation is a drop in the bucket.
And who are "we" in this train-of-thought? If it's shareholders, that's where the root of any problem lies. If shareholders are real businessmen and entrepreneurs who built up the company or similar companies, they will have a clue as to what is a good CEO. If the shareholders are real workers who believe in the company they're working for, they will have a clue as to what is a good CEO.
Today, shareholders are no longer real businessmen or real workers, but retirees represented by bureaucratic investors. That's why they have no clue as to what is a good CEO.
Worker pay is set by the leadership, leadership pay is set by the leadership.
Public unions seem more undesirable. There we have the gov negotiating with itself with no external accountability, unlike your example.
Funny thing, I own a vast number of stocks through various means, either directly or via ETFs, and yet never in my life have I had an opportunity to weigh in on the salaries of anyone in the companies I hold equity in.
> Public unions seem more undesirable. There we have the gov negotiating with itself with no external accountability, unlike your example.
The government is negotiating with unions, not itself. However, if we're going to take a crack at public sector unions, let's start with the police unions.
Really? I get shareholder meeting notices for voting on compensation packages all the time. I admit that the chances of me personally shutting down the pay package of AIG's executive team is pretty much nil, but that's also because I personally own pretty much nil in terms of voting stock, and most people like me probably either don't vote at all, or vote with the board recommendations. Still, it's always within my power to try to start a shareholder movement on this front.
Because obviously what you call "vast" is actually a minuscule percentage of the company.
This is also beside the main point, which is that management shares a class interest with shareholders, even if they aren't literally the same people at some particular point in time. Capital and management are obviously on the same side, and labor isn't part of the club.
Not that my votes "no" were ever successful in curbing the growth of executive pay. Hard to vote against the executives who probably own a decent chunk of the voting shares themselves.
None of them do the "say-on-pay" thing where stockholders get to vote on whether they're happy with the pay packages for named officers?
This is completely untrue. The board of directors sets leadership pay, and often the BoD is appointed by leadership anyway so it's essentially leadership setting their own pay.
Correct. But unlike private businesses, I can not vote by taking my business elsewhere.
> The external accountability comes from you...
Sure. It does via voting. Fair point.
> regardless if your elected official is dealing with a union or a private company
These are two separate things. The gov only affects private companies by regulating. It cannot negotiate benefits with the union or the private company. It is the neutral third party.
With public unions, the gov is both sides of the discussion and the mediator. There is no unbiased party in the negotiation, and seemingly no incentive to vote out pro union officials. I cannot understand why.
1. The gov doesn't haven't to turn a profit, so there is no alternative if prices are driven too high by union negotiations.
2. The union members get to vote on both sides of the table: both for their union wages and for the elected "neutral" party, that is obviously not so neutral.
That said, the CEO pay is easily explainable:
> Profits at the struck auto companies increased 92% from 2013 to 2022, totaling $250 billion, according to EPI
> CEO pay at the Big Three has grown 40% in the last decade, according to EPI
If you're the CEO of a company and you increased profits by 92%, I don't know seems pretty fair to me. There's a lot of other businesses that suck and haven't raised their profits in the meanwhile.
I think talking about the CEO pay is the wrong path (though I do admit it's marketable in the mainstream news). Just ask for what you think you deserve and don't work if you don't get it. It's as simple as that.
Did you? Attributing all the success a company achieves to the CEO feels shortsighted.
Aside from anything else: if all these companies saw their profits grow by so much surely there’s an external commonality there? “The CEO did it all” would be slightly more plausible if only one company experienced that success.
Particularly at early stage startups engineers are often responsible for a ton of innovation. It’s rarely exclusively top down instruction. Same goes for pretty much every company I’ve ever worked at. The CEO is not making every decision and coming up with every idea.
This assumes that the increase in profit is attributable primarily to the CEO. Well, that at least 43% (40/92) of it is.
> Just ask for what you think you deserve and don't work if you don't get it. It's as simple as that.
This only really works with unions. Fortunately, these workers have one.
This is the most wildly privileged take possible on the issue.
If that were true, the pay of every non-union employee would be minimum wage.
The CEO's didn't get 100 billion extra pay, they just got 40% more than before not 40% of all the profits.
Imagine a chocolate bar factory, making chocolate bars for 50 cents and selling them for $1... 1mio per month, 500k profits per month.
Then a new ceo comes, sees that all the ingredients are vegan, there are nuts inside, making the bars "healthy", slaps on vegan logos, superfood logos, changes the ads to make the chocolate bar seem more high end and raises the price to $2 each... due to new logos, superfood text and ads, even with a price increase, 1mio of chocolate bars are sold, and the profits rise from 500k to 1.5mio per month.
Did the workers make the chocolates that brought in 500k? sure. Did the same workers make the same chocolates that brought in 1.5mio? sure. Did the workers do anything differently than the month before? Change anything? No. Did the ceo make a single chocolate bar? Nope. If the workers did the same as they did the month before, and if the CEO didn't make a single chocolate bar, who 'created' the extra 1mio of profits?
Sure, it sounds intuitive to put dollar values to each person, but reality is more complex than that. In the end, workers want to get the as much as possible money for least work done, and owners want to pay as little as possible for as much as possible work done... and that applies to everything, from workers and owners in a company to average joe buying apples (most apples for least amount of money)
Was there an entire marketing department that was needed for this to be successful? Why aren't we quantifying that?
Why aren't we quantifying the new QA processes to make sure the packaging is correct?
Why aren't we factoring in workers downstream contributing to the success by being able to pivot and be malleable in the job making this possible in the first place?
Why is it so anathema to people that everyone can share in the profits? Its not like we're saying only pay CEOs 100K per year or something. 1:25 ratio pegged to the lowest paid worker use to be the norm, for decades, and CEOs were plenty happy with that too.
If they earn so much more, should they pay contractors more too? Does your plumber ask how much do you earn before he fixes your toilet?
What about other supplies? Should they pay more for cocoa? For sugar? Do you pay more for bread in your local store than someone who earns minimal wage?
You do none of that... you try to get the lowest price when you're paying (even if the plumber has 8 kids to feed at home) and get as much as possible when you're the one getting paid. Same with workers.. you pay enough to have them stay and they do as little as work as possible to stay employed.
I agree that some workers should be paid more, and that's why they're striking and hopefully they'll succeed... but taking out a calculator and saying that someone made X more so someone else should get paid more too by the same ratio is stupid. In my country, there's a huge shortage of contractors (electricians, plumbers, painters, tile-layers etc.) and the good ones earn as much as doctors... and due to a shortage, large companies have problems getting eg. electricians (because contracting pays more and gives more freedom), so their pay is going up... does that mean that accountants pay should go up too? (there's no shortage of accountants)
Then why assign the cause of the increase to the CEO?
Literally used to be called profit sharing.
If it's a company of one than I agree. In any other scenario the CEO led the company to a 92% increase. The CEO didn't do this alone. They maybe managed that increase and had a part in it but others most likely did the vast majority of all the work.
Now, how do you feel if the CEO fired 50% of the workers and maybe the remaining work twice as much to make up the slack. This leads to a 92% increase in profits and the CEO deserves the vast rewards?
https://techcrunch.com/2018/04/13/elon-musk-says-humans-are-... (“Elon Musk says ‘humans are underrated,’ calls Tesla’s ‘excessive automation’ a ‘mistake’”)
If profits went from $5 per year to 10, they increased by 100%, but that doesn't mean that you have room for a 100% increase in everybody's salaries.
A much better way to have this discussion would be to look at the dollar value increase in profits versus salaries.
Profits are forecast to be about $32b in 2023, up from about $19b in 2013. At about 240k total employees, and an average union pay of about $30/hr - call that about $90k year fully burdened per employee - a 40% increase would cost the company about $8.6B, or about 2/3 of the growth in profits. That may be overestimating the costs, as there are only 146k workers in the union, in which case the $5.2b increase in employee costs is... 40% of the profit growth, which seems like an entirely reasonable split of employee vs shareholder gains.
Who's to say that the various attempts to "chart a new course" and change business strategy for the shareholder's benefit during that time didn't actually make these corporations underperform vs locking the executives in the boardroom and cutting off all their decision making ability for the same time period?
If a ceo grew front line employ pay and also profits at the same rate, the ceo pay should naturally follow that rate.
On the other hand, if they grow profits by suppressing wages, then they should eat the same pudding they served everyone else.
YOU, the CEO, didn't single-handedly increase profits by even a single percentage point. One employee out of 1 million, take your millionth of a cut of the profits, that's still $150K.
From 2013 to 2023 GM was beat in innovation by both Tesla (Model s,X , Y, and 3) and Ford (aluminum f150 and electric f150, mustang mach e) and has only recently been producing vehicles that look like their 2030 lineup - on the competitor's charging network technologies.
GM was even particularly slow on ice adoption of things like independent rear suspension. Or, the Corvette - where they basically pulled a Nissan and bought the competitor's engine.
Slow to innovate, early to fail (Volt/bolt), purchase from the competition is not what we should define as a good CEO.
And that's not even touching the fact that the workers are clearly valuable and irreplaceable enough that they can halt production like this.
look at tiny barely profitable companies, the gap between median wage and CEO is sometimes less than 2X.
all these takes on CEO pay when the reality is simple - CEOs are paid a lot because they the cost of being wrong is more than their pay. this results in companies that have a lot of money competing, driving up the price. the end. it's the same reason lebron james is paid 10X more than NBA average.
This is a statement that there is low quantity demanded by the market. It's actually a great example of how the naive supply-and-demand argument doesn't make a lot of sense.
I invite everyone here to raise their hand if they're just as hard-pressed as me to think of any job that they wouldn't do for a million per year.
No-one is managing thousands of people.
You might have ~10 direct reports as CEO (common incident command theory says that number should be between 3 and 7, optimal around 5, because after that, you start to lose connectivity between what each report is doing).
Do I wish I could make that sort of money and run a world changing company? Sure do. But I'm self aware enough to know how badly that would likely go for both me and the people I'd be responsible to.
Instead, the board has approved that compensation based on very real business needs: growing the company, acquiring competitors, changing business models, etc. It's actually hard to find a leader who has experience doing that thing and is also the right fit. Hiring the wrong CEO is a quick way to kill the whole company. On the flip side, to the board, a CEO that can drive meaningful growth is worth the risk, even if they have to fire with a golden parachute two years later.
I'm not trying to justify pay disparity (in fact I think there should be minimum AND maximum FT salaries when currently there are neither), but that's what's going through the board's mind when they set CEO compensation.
What separates the good CEOs from the poor CEOs isn't something you can readily teach. Some of the best ones have a preternatural ability for the role in the same sense that Lionel Messi has a preternatural ability at his sport, and are equally rare. The majority of CEOs are journeymen with the skills to do the job but not to be great at it. This doesn't mean that average employees are fit to be CEOs; you don't have to look further than startup CEOs, which are pulled from an above average pool of semi-random people, to discredit that notion. It is a highly specialized skill set that is difficult to acquire and most people aren't mentally cut out for what is required to be good at it. The experiment of promoting rando employees to CEO has been tried on occasion across industry with almost universally poor results.
This is true of most professions that command a high wage. Thinking that anyone could be a CEO is like thinking any dev can be Fabrice Bellard. Even if that turned out to be the case in a specific instance, no one should expect it to generalize.
If you ignore Pelé, the top soccer player had a similar increase in the same period. https://www.expensivity.com/soccer-salary-inflation/ Compared with the median income, they went from 10x in 1979 to 1300x in 2020. Why has the supply of Messis not kept up with the demand for them?
"Star" pay has exploded across all industries (entertainment, sports, and yes, business) and it's not hard to see why. Technology has vastly grown the size of markets, and the "winner take all/most" dynamics of these star-driven occupations means the winners are able to take an outsize chunk of the revenue.
I think there are some other things going on with CEO pay (CEO salaries are basically set by other CEOs, for example), but the parent comment absolutely gets it wrong when they say "the supply of potential CEOs has increased". In the competitive market for CEOs (as well as actors, musicians, sports stars, etc.), people are not interchangeable commodities. Someone who is only slightly better can be responsible for their corporation completely "winning" in some industry, and thus companies are willing to pay top dollar for this chance at getting the brass ring.
What they need to do is to publicly disclose the performance of their CEO. Have CEOs rated by staff and publicly distribute this info worldwide. They also need to implement clawback dating as far as a decade depending whatever products they in charge during their tenure. And lastly, always put full jail offenses directly on CEO without any plea bargain. Not doable? Then workers need to get retrenched as they rightly deserve it when they didnt bother to hop away.
If you expand your horizon somewhat to C-suite in general, it seems that demand for C-suite has tended to increase over time. If you also consider that C-suite is to some degree a Veblen good (demand increases as price goes up) , that makes sense under economic laws. Worker pay, unlike executive pay, is going to be considered a significant cost center, and business will higher fewer workers if individual pay is growing too quickly, making worker pay act like regular goods and not Veblen goods.
 The framework for setting CEO salaries tends to be "take the median CEO pay, add a little extra because our CEO's clearly better than average..."
Sure. It's the same framework that explains the pay of Lebron James. The NBA became a massively popular global game during the era of fast growth globalization, in which billions of consumers entered into the active global economy.
Now you've got like 50 players earning $30m or more per year in the NBA. To play a game in just the US market.
~450 active players earning around $5 billion per year in just league salary (not counting endorsements).
Now do it for global football, NFL football, Nascar, Major League Baseball, Hockey, F1, and so on.
Who knows the insane total compensation figure. $30 billion?
The economic force producing that comically massive figure, is the exact same reason Tim Cook is worth every dollar he's getting paid to operate the juggernaut that is Apple. The same goes for Nadella at Microsoft.
The top 450 NBA players earn more in salary every year than the CEOs of the S&P 500. Why shouldn't a CEO get paid extraordinarily well, as well as an NBA all-star, for operating a $10 or $20 billion market cap corporation? Obviously they should.
The only time I see arguments against high CEO pay (speaking generally), it's from people that know absolutely nothing about what a CEO does or how exceptionally difficult it is to operate a very big company.
And should mediocre CEOs that fail or otherwise perform poorly get golden parachutes? No, of course not. Exceptional CEOs should get properly exceptional pay. They deserve to earn drastically more than the average worker.
The common Redditor railing against CEO pay, looks at a Tim Cook and thinks they can maybe do what Cook does (he just sits in his chair in a big office while other people do all the work, dur dur dur), or what Nadella does, or a random S&P 500 CEO does. In reality they can barely do their own basic job, much less one ten tiers above them. The average Redditor is further away from being able to do Tim Cook's job than they are being able to do the job of Lebron James. The issue is the average person doesn't know anything about what a CEO does at all, they're entirely ignorant of it. However they can watch Lebron James play basketball and immediately understand they can't do anything like what James can do, because they get the physical visual display immediately, meanwhile they know zip about the job of a CEO at a big company. As usual the issue is extreme ignorance and mediocre education.
The most common argument I see is that the ceo pay has increased relative to the common or average employee salary. I doubt being a ceo has become that much more difficult over the same time period though.
So what? The fact that you think this is an argument and not a meaningless talking point further supports the idea that you cannot even comprehend what a CEO does.
The best response I can hope for to my comment is one that tries to explain the mechanism and whether or not it makes society more productive or not and maybe other associated costs if there are any.
> The only time I see arguments against high CEO pay (speaking generally), it's from people that know absolutely nothing about what a CEO does or how exceptionally difficult it is to operate a very big company.
Which links ceo pay via complaints to "how exceptionally difficult" it is to do the job of a ceo. The implication is if people understood how hard the ceo job is that they would not complain about the pay. That implication does not make sense if there is no link between difficulty and pay.
Does this mean that I have been missing the CEO tournaments? surely they must compete with one another after all how else can you compare who is better without a direct face off?. It seems like the big companies always get the best CEOs so they must have scouts all over the place on the lookout for that great undiscovered CEO talent.
Or could it be that big companies always produce "great" CEO because its a lot harder to fail and a lot easier to win when you are stearing the biggest ships.
CEO wage negotiations have nothing in common with employee wage setting.
The NBA compensates workers based on the value they bring to the team. Isn't that what the UAW is arguing for?
The UAW has skilled workers, and they are compensated well in general. Perhaps they should earn, more or less, I'm not sure. But the relative value is exactly the point.
The top 450? There's only 450 players. 30 teams, 15 players on the roster.
> earn more in salary every year than the CEOs of the S&P 500.
No, they don't.
There are 30 teams, with a salary cap of $136M, i.e. $4.08B.
I'm looking at the top CEO salaries and I'm already at $2.6B and I'm only at number 20.
I appreciate how many of you immediately jump to make such egregiously bad displays of business logic in response to someone asserting that you cannot even comprehend the job of a top CEO.
Yet somehow, bundling in endorsements and book deals and other extracurriculars when referring to NBA player salaries? Totally reasonable, apparently.
"Steve Jobs only took a $1 salary from Apple!"
So start there instead of making it seem like your few specific examples speak for the entire population of CEOs. Talk about the CEOs who fumbled completely during COVID despite having a great position, demanded benefits despite their huge reserves and are now crying about having to pay it back while their profits are up.
Talk about the CEOs dumping their toxic waste straight into the rivers to avoid having to pay costs. And the CEOs who push for every trick in the book to pay a close to zero net tax. And the ones who will lobby and keep almost any potential upstart from ever becoming a threat. And those who have solidified themselves in their branch thanks to first mover advantage, and can do whatever they want and still succeed despite our 'competitive free market' (yeah right).
>They deserve to earn drastically more than the average worker.
They already did in absolute terms. Percentages compound. How about explaining why CEOs need an even bigger advantage in both absolute and relative terms than they had before? Did the workers not contribute to their success?
And why are the workers the first to feel the headwind whereas the CEOs are the first to feel the tailwind?
Oh but they do! That’s the rub. Also it’s very hand wavy to say “the CEO’s job is exceptionally difficult”. But that person has a whole bunch of people bringing him ideas and trying to improve the company. In fact, that’s how you even get promoted. So they pick a bunch of things to do. If it doesn’t go well and the stock tanks, the first person to leave are the workers and not the CEO. In fact, in almost every case the CEO is the last to get affected. Win or lose for the company, the CEOs only win.
Is that performance related pay?
Or is it Crony Capitalism?
We should remember that CEO pay is often equity linked, and thus can vary. Not sure if workers want large portions of pay equity linked. I remember I was once in discussion with a hedge fund for a job and they offerred a sliding scale of pay that was cash vs equity. The more equity I opted for, the greater the pay, since of course there was risk involved.
CEOs are much different. A bad CEO can cost a large company 10s of billions in stock valuation. If you have a decent CEO, and you fire and replace him with a poor replacement, the damage to the company will be tremendous, so the board won't want to risk it. This gives good CEOs the leverage to demand massive compensation. A CEO can basically hold the company hostage by saying "I want a $10 million raise this year, and if I don't get it I'll quit. Have fun rolling the dice with my replacement!" (Though they would never actually say it that way) And the company will basically have to choose to pay an extra $10 million or roll the dice on potentially losing billions. This is why they almost always pay CEOs a massive amount.
Don't hate the player, hate the game (seriously, the system is screwed up horribly)
There is more going on with people and work and money than most people seem to acknowledge when speaking in general.
I know it’s probably multifaceted, but my first thought was that increasing inflation since the 70s has meant that there is an incentive to have as much debt as possible, the hope being that it will be inflated away
1. Friedman, Milton. "The Social Responsibility of Business Is to Increase Its Profits." The New York Times, 13 September 1970, https://web.archive.org/web/20230913104415/https://www.nytim...
2. Carstens, Delphi. "HYPERSTITION." Xenopraxis, n.d., http://xenopraxis.net/readings/carstens_hyperstition.pdf.
I say it is fair to hare the player unless they are working to change/improve the "screwed up" game they are playing.
If Steve Jobs—who first created and then basically rescued Apple and started it on the path to where it is today—can be 'replaced' then any other leader can be replaced.
Similarly there are plenty of CEOs that are paid oodles of money that were or are absolute garbage: see Boeing for the last 15+ years as Exhibit A.
I wasn't try to show that they don't matter, but that they are replaceable. And few companies need to have "the greatest mind in Operations that history has ever known" to function well.
Does Eli Lilly, Unitedheath, Johnson & Johnson, Procter & Gamble, Home Depot, Pepsico, Walmart, Coca Cola, Accenture, Intuit, Caterpillar, Lowes, Nike?
Heaven knows that the last few CEOs of Boeing mattered as they have completely screwed the pooch and basically wrecked that company—all the while making a whole lot of money.
Everyone is replaceable, but some people are simply better suited for their role than others.
I do think a lot of CEOs are way overpaid. That said, if a couple hundred million package means the difference between a company folding and firing everyone, or being a multi-billion dollar business with thousands of employees, the math works out.
Yes, I explicitly mentioned that: without Jobs AAPL would not be where it was today. But he was replaced.
If someone as instrumental as Jobs can be replaced then so can any CEO that is/was less instrumental.
And what other CEOs are / were as instrumental as Jobs? What other major companies need to have someone of that calibre?
> That said, if a couple hundred million package means the difference between a company folding and firing everyone, or being a multi-billion dollar business with thousands of employees, the math works out.
Now do the example of packages that cost millions of dollars and the CEOs wrecked the companies, like Boeing, or Enron, or WorldCom. Or Jack Welch's financial shenanigans at GE.
AirPods launched 5 years after he died. It's highly unlikely he was involved at all. That's now also a multi-billion dollar business.
Apple Vision is about to come out. I wouldn't be surprised if that turns into a mult-billion dollar business after a few years.
Yes, Tim Cook does not have the charisma of Steve Jobs, and probably doesn't have the design sense either. But he's awfully good at putting the right people in the right places to steer the ship with him and have quite a strong vision of the future.
That's the entire process of creating the professional corporate managerial class - you have reliably shown that you care more about the financial success of the company, and yourself, than you care for your employees and coworkers.
I mean how many movies and characters have we made that are precisely calling out this exact behavior:
Mr "Coffee is for closers" Blake
Richard Chesler (Fight Club boss)
Like...we've been roasting this precise kind of corporate myopic psychopathic forever as what precisely not to be yet it's like an entire generation used them as pathfinders
Why would it?
If you want to hire a CEO, you either usually are looking either at A) A CEO of another company with experiences relevant the current situation, at a size similar to the current company's size. Or B) A senior exec (CFO, COO, etc ...) at the same company, or more rarely an involved board member.
These are self-limiting pools.
Hold on there chap! How is this obvious?
Looks like only one NBA GMs is paid over $10M.
If the CEO go on strike and don't come to work for a month, how many cars will not be built, and how money will the company lose?
If the union factory workers go on strike and don't come to work for a month, how many cars will not be built, and how much money will the company lose?
Therefore, who is actually more important to the earnings and success of the company?
Put differently: 336 workers’ per annum amounts to the pay the CEO gets.
There are three CEOs in this case so that’s about 1,000 workers to equal their pay.
If I recall correctly there are about 12,000 workers striking, so their cumulative salary is about 12x that of the cumulative CEOs.
I don’t know why, but that doesn’t feel “way higher” to me. I guess I just expected something along the lines of 100x for some reason.
Also makes me wonder how this scales when you look at C-Suite as a whole v. workers.
To keep the equation in check, surely they need to increase at the same rate
Alternatively, if assembly workers were difficult to effectively replace, they would get paid more. Simply doing some unit of work neither makes that unit of work valuable, nor does it make the person doing it valuable.
That is a very sad way to look at human life, and I hope these strikes now and into the future prove that not to be true.
In any case, yes, if someone wants to smash rocks with a hammer, manually, all day, their work would not be valuable to a company building cars, which is what the parent means. Simply doing some sort of "work" for work's sake has no value if that work is not useful.
Has it? Sources indicate that the CEO of Ford's salary has remained quite steady at $1.7 million.
Perhaps you are confusing salary with total compensation?
The CEO gets paid millions of dollars.
Now, total compensation is quite variable as it is largely dependent on stock price. While a good CEO theoretically can compel the price of stock higher by building a better business, realistically it is outside of control of the company.
Obviously large corporation will be more robust, and have things like attorney of power that - so that there's no single point of failure. But, these things happen.
I can imagine a bunch of roles that are more costly to replace than "someone with accountability".
So much for that whole capitalism thing.
CEO's pay rate = (some multiplier) * median salaried worker's pay rate
CEO's pay rate = (some multiplier) * minimum salaried worker's pay rate
We've been conditioned to think it's not fair somehow, but the discrepancy is just....engorgingly terrible. I'm not arguing for how this metric would be enforced, only that it would be a good one to have. Especially in a time when greed is the lowest common denominator in the race to the bottom for some of these large corporations.
It wouldn't fix the stockholder "value" chase, but at least it would shore up one part of the system weak to corruption.
Honestly I think that would probably fix things a lot faster.
This is why Singapore pays them even more than we do.
Anyway, minimum wages (despite being ok policies) aren't what people are actually paid, and of course aren't especially what non-working people are paid. And remember that non-working people, namely children and the elderly, are poorer than workers.
And idk where you got the idea that people don't make minimum wage. They absolutely do. Go look at a job board.
Nobody said the multiple has to be 5. It could be whatever the current ratio for Singapore is.
> 2. only rich people will run in the election.
Which is not true unless you think AOC is rich. It's not unheard of that congresspeople sleep in their office i.e. are homeless because DC rent is high.
any source for this? your link just mentions a representative who has bad credit, it never claims he is homeless.
> Dozens of members of Congress have even turned their Capitol Hill offices into their makeshift apartments.
Of course, sometimes they're just weird and like it. Mitt Romney lives in a small apartment and only watches TV for fun and he's a multimillionaire.
Though, legislators don't have individual power to take action to be worth giving specific bribes to; what may happen is that if someone is friendly to your business, you want to keep them motivated to keep re-running for Congress and do the awful annoying job of being a legislator, when they could instead quit and go back to industry or retire on the beach or whatever.
Corrupt elected officials is more of the norm, than the anomaly world-wide.
Salaries wont fix bribes for someone with that much to command and even the already rich can make a lot of money getting into politics. Their salary means nothing to them.
You live in shitty 2bdrm apartment with wife and two kids in poor school district? With no savings and vacation? Your life is hell and you are that much more likely to take bribes.
It’s all about incentives.
But GDP is a bit misleading. A lot of it is financial services lately. It’s not real goods or services.
Serving in public choice should for duty, not a career.
Make a fixed salary. If you dont like it, get a job elsewhere just like everyone else.
And oh, you wont get qualified candidates - nonsense. We had a movie actor, a silver spoon heir, a community organizer, a real estate broker and a lifelong politician as presidents.
There's nothing in technical expertise that they have in common. They were just good orators with some charistma and a penchant to lie with a smile...on their face.
Oh, you are worried of a bribe? Good thing we have FEC disclosure forms etc. Make them audited every year. Have more bite. Increase sentences. Put bounties on whistleblowing. Then sit back and relax
That's insane no matter how you look at it.
Minimum wage is paid by individuals, private businesses and their owners. Congressional pay is paid for with your money - an effective infinite of your money, or they'll just poof new money out of nowhere to continue to pay themselves.
Correlating the two is plain wrong.
There’s a job market for C-Suite employees (whether we care to admit it or not). At a certain point you won’t get qualified candidates if you can’t reward them enough, same as engineers or any other role.
The answer for how much CEOs should be paid is the amount of money you would need to pay to employ the most optimal person to run the company. Figuring out what that number is is difficult.
Do you have arguments or are you just going to call someone a “doo-doo head”?
So why are we entertaining 100M salaries? That sounds like giving away money.
The janitors don't?
The cleanliness of an office space is a gigantic force multiplier for productivity. I wouldn't be surprised if janitors had a bigger impact.
And it can sometimes be VERY illiquid. Headhunters help to provide this liquidity and get paid for it.
Sometimes C-suite career people can go years without a job. Not every CEO or CFO makes fortune 500 comp and many people falsely assume low compensation volatility as e.g. a "career CFO". It can be extremely stressful, especially with family/dependents.
How do these people get to be C-suite career people? Seems like you basically have to be born into modern nobility. I've asked people who work with them about this and they make these vague claims about 'ultra drive & competitiveness' but I don't buy that those things are magically statistically concentrated in Ivy League grads.
I think of that whenever I’m back in San Diego and remember the tree poisoning lawsuit where these two rich guys were feuding because the one whose mansion was in front had a tree which kept growing and the other guy thought that was depriving him of a fractional sea view. This ended with the twist that he paid his gardener to poison the tree, but was caught and … I just couldn’t get past thinking about how this guy was a millionaire, living on the cliffs over one of the world’s better ocean views, and all he could do was think that it wasn’t a degree wider.
(a) The stress is very real, and
(b) It's not self-created, it arises due to the responsibility and magnitude of decision-making coupled with having to deal with other execs that are promoted beyond their ability yet somehow still have absolute faith in their ability to lead and execute despite their limited experience, worldview, or both, and
(c) It seems to be about the same amount of stress as those worrying about tight finances, but less than those worrying about where the next meal is coming from.
Having said that the majority of CEOs that my spouse and I have worked for cannot find their asses with both hands but a minority of them have been incredibly good and well worth the compensation they were paid.
It is in no way comparable to people that need to work to live.
If we can hit a nice logarithmic return on investment for company size, I think that would be nice. Like many things, perhaps impossible to easily achieve, but it's a nice thought in idea at least methinks <3 :'))))
"Should" by what standard? Minimizing deadweight loss?
The end result of this situation would probably be a mad dash to automate away any blue collar work, which may not be such a great thing.
It’s a tough problem.
More typically, this results in the outsourcing/contracting away of lower value work.
I would say it would be a huge upgrade to get rid of investor CEOs and put in a worker CEO in place instead.
I always think "I can clock out at 5pm" or "If I screw up it'll only cost me my job and not 1,000 people their jobs"
C levels deal with stuff I am not interested in and the while the pay is appealing the added life complexity is not. Thus I W2 while seeing my kids 90+ hours a week.
Are there any examples where this isn’t true?
I know someone who works as an engineer cleaning up nuclear waste. The workers who do the job he engineers are paid more than him. He is ok with that but did pass the comment that it’s an unusual situation.
He said someone offered to buy the company for $60M cash I think it was? Which is astounding.
I think the offer he mentioned was $100M for LTT.
I think NPR does a lot of damage not questioning assumptions like this. Or, often times, putting them out there themselves.
Google says: 167,000 GM employees
Mary Barra salary: $29M
Distribute that salary across the whole workforce: $174 per employee
They should really be talking about it in terms of inflation or profit margin. GM profit for 2022 was $21B
No one is saying the CEO is taking money the employees would have otherwise earned. When you divide it out like that of course its a pittance per employee.
The statement is about the relative scale of the CEO pay to one employee. I don't care about the difference applied to all employees.
An absurd parody I always imagine: John is 7ft tall. His group of 6 other other friends are only 6ft tall. Wow John is really tall! Nah, if you distribute his tallness between his friends they would only gain 2 inches! That has nothing to do with John being 12inches taller than any one of them.
If the employees really only care about that ratio, then they should accept that outcome from their strike. That's not why they are on strike, they also want to be paid more, just like the CEO.
"If c-suite really only cares about $ spent on labor, they would accept the productivity outcome of their salary proposals to employees. But they don't. They want to get more productivity, just like the workers of [insert competing corp], while not changing or even reducing comp."
The reason your comment is disingenuous is that it assumes that the best place for this money to go is into c-suite/board pockets, and for some reason assumes that workers wouldn't take the couple extra grand the CEO pay split would give them. I challenge any CEO to put it up to a (non-binding, don't shit yourself) company-wide vote.
But let's disregard the salary split. It is an incredibly simple-minded way of approaching what to do with millions/year. Are all of you, who justify these ridiculous ratios, truly unable to think of ways to spend dozens of millions of dollars to improve all employees' qualities of life? Those who spend all this money on consultants to figure out how to squeeze an extra penny of profits can't figure out how to further optimize the health of the workforce instead?
Cue the comments about "no choice, fiduciary duty". Makes me sick.
the same logic applies to CEO pay. you can either pay the CEO a lot, or you can pay everybody else an amount so slightly different that it's unnoticeable. there's value in paying a CEO a lot, or you can not pay them a lot, and not pay anybody else any more either. surely you can see how there might be value in offering a high salary for a role that can have a big impact on the company, and how simply not doing that and essentially erasing that money instead would be a bad decision?
$2 million, actually. The $29 million is total compensation; mostly stock awards.
I suppose I should be paid 167,000 more per year as a software engineer at GM because it's only 1 dollar per employee?
So interesting how that works.
Even better, if they're managing their pensions via investment houses, why not just build their own investment house and leverage their negotiating position that way?
But beyond that, meaningful equity in the hands of labor should surely be the goal — it aligns interest in a way that cash can’t.
It would be interesting to see what happened when the shoe was on the other foot.
I thought I read that at Japanese companies the CEO doesn't make 300 times what the workers make. Maybe the CEO made 10 times at most?
Why is that obvious? This foregone conclusion stuff is just notes cribbed from the aristocracy. You're not aristocrats, you're citizens.
...Akio Toyoda, was paid ¥999 million ($6.9 million) last fiscal year...
"Owing to culture or corporate structure, the salaries of American executives and foreign executives in Japan have historically been much higher,” a Toyota spokesperson said Friday. "We’re aware of the gap and we’re working to fix it.”
Nissan, which has just shuffled its leadership, also published salaries Friday, showing that former Chief Operation Officer Ashwani Gupta was paid ¥726 million last fiscal year. CEO Makoto Uchida made ¥673 million.
Honda said last week that its CEO Toshihiro Mibe was paid ¥348 million and Chairman Seiji Kuraishi got ¥138 million.
Wages are theoretically a market, and probably it's often easier to replace a skilled manager/business bro than it is a skilled engineer/artist/salesman, and often it's more important to your business.
Basically, the story goes that when an individual rises into a significant leadership position at a large enough company that the economic calculations become different. There's still an element of domain expertise, but, for the most part, leadership is leadership wherever you go. This implies that a leader could (potentially) move across sectors and still be effective which results in a wider pool of companies that are interested in competing for this person when contrasted to the ICs. Since some sectors are very profitable they end up "bidding up" quality leadership. The combination of this effect along with the fact there are objectively fewer CEOs than ICs results in a mismatch in salaries.
I think there's an element of truth to this, but probably not to the extent that it justifies the widening pay gaps everywhere?
It’s why when Intel was floundering a few years back they got rid of CEO and brought on a CEO with deep engineering expertise.
Tim Cook is a wizard of supply chain, and in many ways that’s a large part of Apples current success, IMHO. The list goes on.
Counter-example: the last few CEOs of Boeing who have completely messed up the company.
They came from the Jack Welch of GE school of management, and it turns out that Welch et al were cooking the books. See also Enron and WorldCom.
The first Boeing CEOs were from Boeing and were steeped in Boeings engineering culture and valued that expertise. Later CEOs like you mentioned didn’t. Boeing also acquired McDonnell Douglas, and many thought it was great that Boeing got to keep all McDD’s “experienced” managers.
The screwing up started at the top by changing metrics and priorities post-McDD. See Flying Blind:
And the screwing up was richly rewarded.
Okay but don't many other companies deal with supply chains? I guess software companies don't, but "companies that trade in physical goods" is a pretty big segment, and it stands to reason that having "a wizard of supply chain" would be useful. Doesn't this translate into an argument in favor of "leadership is leadership wherever you go"?
To the extent that it truly doesn’t matter, the ceo is a glorified mascot.
Not all CEOs are built the same. Only a minority are able to cross industries successfully, the majority fail miserably. This is because elements that drives success are different between industries. Most of the time, if the CEO is successful one way in one industry, he/she would pursue the same path in another industry, without acknowledging that the second industry is different. What's worse if when they bring their previously successful team. Now you've got a bunch of people doing more the wrong things at the same time.
Now analyze that a little deeper: How do we know they were successful before they tried to cross industries? Solely because the company they were CEO of did well while they were CEO?
Absent a fairly egregious set of drastic changes (eg, Musk's Twitter), the success or failure of a company is both much more complicated than the contributions of any one person, including the CEO, and a trailing indicator. It is very easy for a CEO to make changes that will not be fully felt—for better or for worse—for years after they "step down to spend more time with their families".
We do not have good metrics for successful leadership. We just don't. And despite this, we have whole subcultures that have grown up around the idea that these people, who are often actively detrimental to the organizations they manage, are geniuses singularly responsible for the company's many-million-dollar (or even many-billion-dollar) profits.
So what if I don't get my contract renewed if I have $50 Million, that's more than most people make in their entire lives. See you at the beach!
At some point sure maybe I can work for a couple of years and I will earn enough to buy myself a super yacht... but I don't want a super yacht as much as I want to not work.
It's very funny to me that people make the argument against raising welfare that there will be no incentive to find work, yet somehow they think this same argument can't apply to the super rich who can retire with a lot of money instead of struggling along on a subsistence income.
what is leadership other than being stern, following up, driving projects to completion or up/down the org chart as needed (escalation, etc.)?
I don’t understand your comment at all.
Auto workers aside, this is always a crappy stat that is thrown about.
"Top US companies" is rife with survivorship bias. It's like saying "the CEOs of the most successful companies had their pay increase..." Well yeah, when a company is successful, compensation rises.
Average CEO pay across all companies in the US is like $250,000.
Honestly, if the union wants similar compensation as the CEO, they should have the same pay structure as the CEO - 10% in cash salary and 90% in options or stock. When the car company does really well, they make a ton of money, when it does poorly, they make almost nothing.
But I would guess they wouldn't go for that.
Only for the C-suite apparently.
> When the car company does really well, they make a ton of money, when it does poorly, they make almost nothing.
That’s already how it works. Workers took pay cuts in 2008 to keep the companies going. It worked and now the UAW is asking for the same pay recovery that the C-suite already received.
Seems like you missed the point entirely, but ok.
But anyways, that's false, US autoworkers have a profit sharing component to compensation.
> That’s already how it works. Workers took pay cuts in 2008 to keep the companies going. It worked and now the UAW is asking for the same pay recovery that the C-suite already received.
Workers did not take pay cuts in 2008, the autoworker unions actually created a multi-tier compensation structure that protected existing union workers (surprise!) and penalized all the new hires.
And CEO compensation, at least at GM dropped by ~80% after the 2008 crash.
• Ford F-series(F-150 being the most popular car in the US)
• Chevy Silverado
• RAM Pickup
• Tesla Model Y
• Toyota Rav4
• Honda CRV
• Toyota Camry
• GMC Sierra
• Nissan Rogue
• Jeep Grand Cherokee
So 6 out of 10 are American.
What's the list globally?
I guess American non-Tesla cars still are popular in places like Texas then?
I believe that workers and non-CS engineers are horribly underpaid around the world. They are underpaid in the US's Aerospace, they are underpaid in Russia's military industrial complex and they are also underpaid in China which actually supplies the stuff that everybody uses. Don't doubt they are also underpaid in Japan and Korea.
I mean this in all seriousness. What in the past 50 years of deindustrialization makes you think that that as even a possibility? Sure, it’s the Econ 101 textbook answer. “Creative destruction” and all that jazz. But in reality, how has that actually played out?
But, you have to keep working there and you have to be able to afford to wait for the vesting.
Equity based payment will attract a different risk profiled group than salary will.
If both Wal-Mart and Amazon drivers strike we might actually have a shot a taking a bite out of capital finally.
what do you think will happen to the cost of goods? what companies do you think are operating with enough margin that they can just afford a 20% rise in their payroll costs?
A better question to ask is what will happen when a larger portion of the profit that these workers created now flows back into their communities?
Workers spend their money at family run business, and small to medium size businesses in their community and contribute to the local economy. The economic implications of this effort are not just beneficial for the 150,000 UAW workers but their communities and local economies as well.
In contrast the board members who are reaping those profits are not spending money in those communities. Even if they theoretically lived in the same communities and frequented the same businesses they would not buy anywhere close to the same quantity of goods and services that the 150,000 uaw workers would with those same profits.
Companies are profitable, by definition. If they aren't profitable, they die (eventually). As long as there is a profit, worker pay raises does not need to be completely covered by an increase in price. Where does profit go? Into the hands of the rich.
Thus, workers demanding raises is simply a progressive wealth redistribution, from lining the wallets of fatcats, to rewarding the people who actually created that wealth.
in the case of the GM stock particularly, are shareholders/investors reaping profits and benefit? go look up the GM stock, it's flat/down over 5 years
You failed to take into account that GM issues real stock (unlike most tech companies) and thus pays dividends. If you take dividend payouts into account, the value of an investment in GM has been indisputably positive (though probably not more positive than inflation).
Sounds acceptable to me.
"Labor costs, at roughly 5%, remain a small percentage of annual costs for the Detroit automakers, according to Dziczek."
It’s not about a one time 20% raise
Think more like:
“4 day work week”
“Return to 1945-1949 tax rates”
“convert corporate to cooperative ownership”
An employee’s value is relative to a gear, cog, or assembly of them.
A CEO is akin to an engine, infinitely more valuable, a requirement for functionality, is the force behind a company’s goals and provides locomotion.
The automobile itself is the company.
While an auto may function without gears and assemblies the performance will be sub optimal.
An auto functioning without an engine is said to be coasting. A company without a CEO is also coasting.
The value is supposed to be performative. A great CEO provides direct value, direct movement, and is rewarded thus.
A CEO that delivers alpha deserves a big cut of that. The board exists to hire leaders that can deliver alpha. A good deal fail to. But the ones that do are more than worth their compensation.
And btw you have 0 chance of attracting the kind of CEO that can deliver alpha by offering peanuts. It doesn’t always work out and there’s plenty of snake oil CEOs, but the good and great ones are worth every cent to stock holders.
Businesses compete against each other and the CEO orchestrates the strategy and is accountable for the the execution across a broad spectrum of functions. There is a power law distribution where the very best CEOs are vastly superior to the good who are to the replacement level ones. So like in the NBA you may overpay for a guy in the hopes they are great or you pay handsomely for a good player that is above replacement level or you pay the highest for the best to run your company. Sometimes it pays off and sometimes not.
But the value that great CEOs produce is astronomical. Well more than a basketball player could ever hope to produce.
CEOs are often overpaid by a lot. If I had as regular access to the books and the board of directors as C-levels do, I bet I could be paid a lot more too.
On a per-unit cost, what’s labor vs CEO?
there’s 160,000 employees
$72.50 a year per employee
a $1/hr raise for a full time employee is $2,080/year
they makes $17/hr and UPS makes $21/hr on the low end part time wise
lots of employees want at least $8k/yr raise ($4/hr on the low)
a bit different from $72.50
It starts with a good idea, but if you let it fester, then it quickly becomes more of a drag than a productive addition to your organization.
While its not exactly a vindication, I feel super vindicated right now and I'm not gonna be reasonable this time.
These companies have no way out, they are going to die! All these people will lose their livelihood and worse their options to monetise their skillset/experience will be next to zero. Is this your utopia?!
I've been researching Ford for a while, they have so much debt and an extremely small margin for error for the EV transition. It was gonna be so tight and now their fate is sealed.
I'm not proud of this but a part of me find a bit of joy in what comes next. There is this Thanos side of me that feels like a grave injustice have been done here. These people have no right to have this much power over a company.
You really think a CEO isn't worth 300-400x more than a line worker? Honestly I can't fathom that level of ignorance/cognitive-dissonance.
Replace CEO with any sort of leadership role in any kind of organisation/entity with skin in the game (where outcomes can hurt). Whether if its football coaches, generals, head of state etc.
I know nobody (sane) disputes the difference between a c-suite employee vs a line worker but what I'm talking about is the exponential nature.
These people are barely human. Imagine the stakes, the leverage, the consequences and the sheer amount of context you need. Being in the top percentile of IQ, EQ, competence, industriousness etc are just tablestakes. You need to be ruthless while at the same time have an immense capacity for empathy. You need to be extremely conscientious/industrious while at the same time having a large reservoir of creativity. Its like the infinity stones, you can't just be a galaxy brain or just have the gift of the gab or be a psycopath. You need it all and more while competing against people just like you for rarified roles.
To top it off, all of this just gets you into the ring, you also need to actually win and win consistently over period of time. Usually this requires sacrificing your entire life. Btw this where the barely human part comes in, these people thrive on this. All these CEOs have enough money to retire on a beautiful ranch or oceanfront mansion, instead they work 70 hour weeks.
And you think these people are somewhat similar to the guy who screws in car parts? You think society should value these people in somewhat the same realm? like a linear nature (50% or 300% more).
This kind of thinking is what leads to the end of civilisations. These people should be revered. We should be grateful.
I still can't accept there are people in the world who think its somewhat similar. This is not an IQ thing, its not even a being well read thing.. This is common sense.
We all have met people in our lives where we go "oh there are level to this game", like freaks of nature.
How can you not think its the same for you know, leading a multi billion dollar public corporation with hundreds of thousands of employees.. Its mind boggling. How can people no see the asymmetry!
But many execs are not. They work just as obsessively as the first type, but only to increase their own power inside of the organization, at the expense of the organization's cohesion, trust, productivity, and quality. They live in a bubble, totally disconnected from the organization's purpose. They make strategic mistakes over and over again. They fail to truly understand why even a single dollar of revenue happens; instead they take it as a given that the money is coming in and only think of ways their unit can siphon off more of it, at the expense of all the others.
If just one of these type 2's enters your organization, you can typically get by, as long as you recognize them quickly enough. If even a small handful enter your C-suite, they will metastasize, cause your type 1's to leave, and put your org on a death spiral.
Many execs are of the second type. You can tell: if you use a product or service, and it sucks, that's probably what's going on at the top.
Its not uncommon to see people in these roles because of nepotism, they write the checks or they are good at short term games (machiavellian, gift of the gab, office politics).
That said, such exceptions tend to not last long because of the unstable nature of these situations.
In other words, those who match the description I made earlier tend to eat these peoples lunch given enough time.
In a civilized society I would say maxing out the top paid employee of a company to 20-30x of the average of the salaries of the bottom half of all salaries in the company is what should be done. Anything more than that creates a system of perverse incentives to take action that is against the greater good of the community.
I'll start by saying there is a lot of nuance here with cases where I might even agree with you but I'm going set aside nuance in service of getting to the core of my point.
The guy who pushes around a trolley, unpacks a box of goods and puts it in the shelfs of a local branch of a nation wide grocery chain is not just worth 30x less than the CEO of that multi billion dollar grocery chain.
The key distinction here is that the difference isn't just linear, its non linear with a steep gradient. You can replace that guy with a 12 year old disabled girl and it would make almost no different to outcome for the multi billion dollar grocery chain.
Whereas if you hired a slightly less competent/experienced CEO and I mean like 0.5% less, the difference is tens or even hundreds of millions.
The non linear nature to this is not just something to do with humans, its a natural phenomenon. Its the Pareto principle & distribution.
Maybe things can be in the realm of 20-30x when we are talking about CEO vs the rest of the C-suite.
P.S. Just to directly address your civilised society claim: There is nothing civilised about the proletariat or their puppeteers dictating by fiat how far high a person can fly before their wings get chopped off. Btw in such a society, those who chose are an order of magnitude more powerful than the most richest and powerful in our current society. You just replaced one set of elites who "atleast" "somewhat" earned their station with another set of elites whos only skill is in being a good orator.
Just do you know I'm using all the restraint I have in me to not question your mental capacity using slurs (pls don't ban-ish me señor Dang, grant me this sentence).
There isn't enough margin in the R&D + logistics of producing cars as is.
Ford's stock is up 25% in 5 years, vastly underperforming the index
GM stock is -5.6% over 5 years
Stellantis stock is +3.55% over 5 years.
Where is the argument that the greedy capitalist meanies at the top are doing nothing but buybacks with the millions in profits inflation the stock?
The consumer will buy a car from a non-union automaker that charges less.
The pendulum of globalization is bound to swing backwards for a multitude of reasons.
That's what us Germans did, and look where it brought us to: our car companies make a significant chunk of their profit in China - Deka estimates the Chinese share of BMW profits at ~40% , for VW all I could find is that 41% of their exports go to China, for Mercedes it's 37%.
Now the Chinese government is massively subsidizing domestic electric vehicles, and our car companies are headed for very dark times.
You could always sell to the rest of Europe, but since they're in a fiscal union with you and you refuse to deficit spend, they're not very good customers.
I mean, there's retaliation. Trade is mutual.
Many of them acolytes actually ruining their domestic economy by executing on these principles.
Maybe that article linked would help you understand the structural cost implications that are proposed.
We should all be lucky enough to have the chance to earn in a few months what we'd normally make in a lifetime. I'll gladly accept the extra risk that goes with that.
Used to be the best warrior had skin in the game. We have them resources so when the lions came or the boars got into the crops, they were ready to kick some ass, even if the rest of us were undernourished due to a drought.
Now they just "take full responsibility" where that just means they have to announce that something dumb happened on camera. Truly a gruesome fate. So brave.
What? The CEO of any substantial company is going to have a golden parachute in their contract. Literally the opposite of putting everything on the line, just merely "Will only make X, not 10X, where X may well be more than median lifetime earnings, even if the company completely collapses."
So despite GM paying the CEO millions, they couldn’t prevent him from making mistakes?
1. poorer people spend a much higher % of their income, whereas rich people save it.
2. there's a lot more poorer people than rich people, which unfortunately can mean they're more capable of moving prices.
This is sort of related to why the middle class thinks full employment+low inequality economy is worse. There's other middle class people to bid up prices, and service at restaurants is worse/more expensive. It's nice to be in a high-unemployment high-inequality economy, if you're employed.
I don't see how stock buybacks relate more directly to anything here than retained earnings, or other kinds of reinvestment. They're just an effect of market conditions and the stock price.
The car market is extremely ugly right now.
Between UAW Strike, SWG Strike, barely avoided UPS Strike, and probably a few I'm leaving out, we're going to be inundated with half truths, misdirection, selective statistics and even the occasional outright lie.
UAW opening demand isn't just a 40% pay hike - but also a four day workweek (when combined is ~70% increase in pay). Nobody expects for UAW to get everything they demand (that's not how negotiations work of course) but still, it's a particularly unreasonable starting position and is likely demonstrating just how far apart both parties are.
It's become a sort of meme to bag on C-Suite salaries - with a lot of folks fundamentally believing C-Suiters don't earn their pay or at the very least don't earn the extreme pay gap between them an your average line worker.
Anyone thinking a C-Suiter clocks out at 5pm and doesn't work after hours has no experience in the C-Suite (or even upper management for the matter). There isn't really a such thing as "off hours" for these folks on average. Correspondingly, decisions made by your C-Suite can earn a company huge returns, or doom the company and all of it's employees and stake holders.
Comparing C-Suite compensation, pay scale, growth rate and disparity from line workers is disingenuous at best. They cannot be compared, nor should they.
Why? Why is it that CEO pay reflects company performance but not the line workers? It seems incoherent. How does the collective performance of line workers, which we can predict somewhat from salary, not impact company performance? Where did this idea that only in upper management does salary correspond to company performance? What research was done?
Aside from the rare company built by the CEO wholly or largely, CEOs just seem to come from wealthy families, are tall handsome men, and have all the right connections. These are not brilliant geniuses. Being a c-suite executive is not a meritocratic thing most of the time, it’s an inherited privilege.
Compensation is not a function of their performance, it’s a function of their ability to hold their businesses hostage and threaten to tank their companies unless they’re paid high salaries. Rotating out the c-suite will at least temporarily tank company profits. It’s about power not merit. So why uh, doesn’t the union do the same thing and also hold the business hostage? 40% is not wild at all, it’s a drop in the bucket for shareholders because salaries are so low to begin with.
"By 5 p.m., I'm like, 'I can't think about that today. Let's try this again tomorrow at 10 a.m,'" he told the Economic Club of Washington, DC.
It's kind of like how people think Bill Gates or Steve Jobs just accidentally became some of the most successful people on earth...
I’m not saying SREs are poorly paid, but they often are keeping entire companies afloat, and their pay is nowhere near that of the C-Suite.
If the entire SRE team quit / went on strike, there is a non-zero chance the next incident would utterly break the company.
If the entire C-Suite quit, uh… what exactly would happen? People would continue doing what they had already been doing?
Executives are overpaid. Period.
Ah, and the SRE team assembled themselves, hired themselves, decided what to work on, direction, technology, plans, etc all on their own?
Or is there a C-Suite running the SRE team, even if indirectly?
> If the entire C-Suite quit, uh… what exactly would happen? People would continue doing what they had already been doing?
This is beyond naïve, I'm not sure what to call it. Yes, things hum along for some duration... and then what?
C-Suite are not laborers, as you've queued into. They provide direction, guidance, goals, identify problems, etc.
Take a human being without any of that in their personal life. What becomes of them? Nothing good... it's similar for a company. The wrong leadership dooms a company before any of the line workers even notice.
And you think the CEO did this? No - hiring managers and directors decided it was necessary.
> This is beyond naïve
Not at all. Who decides what the product needs? Product Managers, or sometimes Engineers directly. “Setting company direction” is vague at best, and can easily be replaced by people in more direct contact with customers.
And in any case, you made my point by agreeing things would hum along for some time. Executives are not critical to a company. Workers are. Without workers, profit immediately goes to $0 (modulo automated factories / SaaS, but as mentioned once something breaks, you again need people).
You seem to believe that workers are incapable of autonomy, of seeing needs and meeting them, etc. This is why Scrum exists, because people like you don’t think people like me can be trusted to do what’s necessary to keep things running.
Where did the hiring managers come from? Poofed out of nowhere?
How did they know what to hire? Just made up their own direction?
This would be like if a McDonald's line cook could just decide the company no longer will offer the Big Mac because they don't like making it.
This line of thinking is so typical for a developer. You even reference Scrum like that means anything in the areas we're discussing. But even in that setting, how do you think Product Owners know what things to prioritize? They're just making it up as they go?
Now you're talking about founders, which is !=== CEO. I have respect for founders - they built something. If the founder happens to still be the CEO, then same. If instead it's just yet another suit, then no, they had nothing to do with the hiring manager.
> How did they know what to hire? Just made up their own direction?
I mean, yeah? Do you think that everyone under the CEO is a helpless infant, incapable of independent thought?
> You even reference Scrum like that means anything in the areas we're discussing.
Because they stem from the same line of thinking - that workers must be managed, lest they wander aimlessly and destroy the company.
> This line of thinking is so typical for a developer.
Two fun facts: I'm not a dev (SRE/DBRE), and tech is not where I gained this line of thinking. I spent a decade as a nuclear reactor operator on a fast-attack submarine. Submariners in general are taught to be independent, and fully capable of taking over someone else's duties when necessary. Nuclear-trained personnel, even more so, and those who actually operate the reactor (me) yet more.
Could a submarine leave port without the Captain? Ideally not (and the Navy would never let it happen if they had a choice), but we are absolutely trained to do so. Hurricane prep during in-port periods mostly consists of making sure the duty section are the good ones, because if it hits, whoever is on the boat is going to start her up _real fast_, take her out, and submerge. A $2 billion warship is entrusted to a skeleton crew of personnel because we know what we're doing.
It's worth noting that Google - who invented SRE - heavily borrowed from the Nuclear Navy .
"Yes, but the C-suite is responsible for $zillions"...
Are they personally responsible? If they fail in their job do they get to reimburse the investors for money they lost? Hardly, they tend to get a golden handshake and move on to another company whereas that vet, the farmer or the mechanic tend to be punished for failure in some way - by loosing their accreditation, livestock or livelihood.
C-suite remuneration has far outgrown its justification.
> Comparing C-Suite compensation, pay scale, growth rate and disparity from line workers is disingenuous at best. They cannot be compared, nor should they.
Why should they not be compared? Why should it not be discussed whether an hour of a systems engineer's life is worth far less than an hour of a CFO's life? What great sacrifice does the CFO make which the farmer does not to explain the disparity in remuneration? An hour in a life is an hour in a life no matter your profession, you won't get it back when it is gone.
Their demands are only unreasonable if they lose. This is a strike. It's fight, not a discussion. The goal is to give the company no choice but to give in. The strikers are under no obligation to be fair. They can make whatever demands they want. They don't have to give an inch if they don't want to.
>They cannot be compared, nor should they.
Comparing them is pretty simple, actually.
You have: 21 million USD / year
You want: (28 USD / hour) * (40 hours / week)
you're ignoring the contributions of people in the company that make the C-suites job possible. Why should the C-suite be entitled to this just because they work long hours?
I work long hours. I've had jobs - salaried, mind you - where I worked past 5 PM, well into the evening, and no stock options are not the same. At any rate, one of those jobs the stock options weren't worth anything anyway.
CEOs get golden parachutes and gobs of money and for what all, exactly? What do they actually contribute?
I'd love for there to be an experiment where you take a senior operations person, for instance, and put them in the CEO role, and see, if given the same support and onboarding, if they can't make good or possibly better decisions than the someone with "CEO experience"
I've met alot of CEOs, and they don't tend to be very in touch with their workforce, they simply see what they want to see, most of the time, few exceptions.
For everything besides growth rate I can see arguing that they can't be compared—I don't agree, but I can understand where you're coming from—but why should a CEO's salary go up dramatically faster as a percentage than line workers'? Is the CEO somehow working 40% more hours than they did last year? Working 40% harder? What is that 40% tied to that line worker salaries shouldn't be tied to?
Your average line worker cannot impact the entire business like this. They alone cannot be responsible for huge growth or periods of rapid shrinkage.
They just happen to be the most visible...
We already use this to justify the massive disparity in raw salary, so it doesn't make sense to use that same argument to justify the massive disparity in percentage increases as well. The scope of influence is already factored in to last year's salary.
Raises on the order of hundreds of thousands would not make sense, but why not raises that are comparable as a percentage of pay? Each front line worker making (for easy math) $50k a year in 2022 can absolutely contribute more than $20k to a year's growth.
That's not the standard, though. The criteria is cost above replacement, and quite frankly modern executives show up extremely mediocre on that measure. Companies flip executives all the time, and it almost never results in significant changes to revenue (and when it does, it's down as often as up). In fact there's almost no measurable meritocracy among salaried executives.
The reason executive salaries got so high is simply that the class the makes up the C-suite residents (the major investors and board members) got jealous that the outgoing founders of these companies got so rich, and wanted to play in the same sandbox. It's only fair, right?
But that's exactly the moral argument UAW is making: these companies got fabulously wealthy over recent decades owing to GDP growth and stock market booms, and they should share that wealth with their employees and not just keep it for the owners. The only difference is in how you define "employee".
1) You cite cost of replacement - yet these companies are unable to replace their C-Suite with anyone costing less. Therefore, they can command the compensation levels they do (not to mention compensation != in pocket pay).
2) UAW employees are indeed readily replicable with little or no training on average. Offshoring is very realistic, and there is no shortage of high-school educated folks willing to work in a factory/plant for current levels of pay.
Inflation is putting a squeeze on everyone, and it just so happens your average worker is feeling it the most. It's no coincidence all these labor issues and strikes are happening right now.
It's not. The moral ground has been ceded. Now it's just about "I got mine".
They can replace their C-suite with me. The fact they don’t want to because I’m not some rich, well-connected, historical CEO does not mean they don’t have the option.
I’d do the job for just the basic pay package.
Simply stating they can hire you and they don't because you're not already well-connected clearly demonstrates you haven't an idea what these people actually do.
My point is that there are a lot of people that would make perfectly fine CEO’s skipped over because they’re not already a CEO/born into connections.
The strongest signal people use for determining whether they would be any good is whether they’re already one. Which is how people that torpedo a company get re-hired anyway.
Unlike for example, engineers, where we assume they can’t program their way out of a pack of butter even when they come in as a principal.
CEOs make big decisions... but they get paid more money than they'll ever need even if they do doom the company. In fact, many CEOs against union workers are torching their own companies to avoid a fair deal which would cost their businesses less.
The only way CEOs would justify their high pay is if we were able to hold them responsible for their company's misdeeds and throw them in jail. But since Sundar Pichai is still a free man, we clearly definitely don't do that either.
CEO is a completely zero-risk, massive return job that you get largely for knowing the right people and having a deeply flawed moral fiber that enables you to sleep at night after doing unusually cruel things to everyone else. That's really all there is to it.
I don’t think this is necessarily true. You might just be really good at lying to yourself.
Trying to justify exorbitant C-suite salaries because they often work hard (in conditions significantly easing working hard due to having a litany of assistants to handle boring stuff, private jets, drivers, Michelin starred meals with regulators, lawyers an executives counting as "work") is silly when you look at how hard so many working class people work. But I know you know this, so it seems you're just blaming them for being born poor, unconnected and not having the "big business brain" that all C-suite executives must have.
Other benefit: less environmental impact, more time for people to improve themselves and their mental health, etc.
There is no hard evidence for this belief. In fact, and especially for creative jobs, employees that are well rested and happy will contribute more than stressed out plebe barely getting by.
If met with the 40% pay increase it's another huge pay raise. There is no reality where line workers screwing in the same 3 door bolts all day long are getting what amounts to an effective ~70% pay increase.
Additionally, the 4 day work week is yet unproven in an industrial setting, such as are UAW member's jobs.
> There is no reality where line workers screwing in the same 3 door bolts all day long are getting what amounts to an effective ~70% pay increase in one year.
Please align your own comments. They are looking for a 40% hourly pay increase over 4 years, and a reduction to a 32 hour work week. These combined work out to an increase of 12% in annual pay, over four years. No UAW hired since 2007 makes more than $17/hour.
If you're looking for more details of what the UAW wants, they are in this article: https://www.cnbc.com/2023/09/13/where-uaw-negotations-stand-...
In four year's time, will their pay be 70% higher than it is today if all demands are met?
Are you hopeful about a 70% pay increase in four years? I sure am not...
No? If a given employee is making $17/hr, and working the union agreed 40 hours a week, they are making $35360. If they get a 40% raise over four years, they will be making $23.80/hr, and working 32 hours a week, giving an annual wage of $39,603.20. This is an increase in annual wage of 12% over four years. The hourly wage is an increase of 40% over four years. No one is getting close to 70%.
> Are you hopeful about a 70% pay increase in four years?
Honestly yes, I think that is in the realm of possibility, as I'm currently pretty underwaged for my industry and experience level. Currently interviewing for a job at a 45% increase. Regardless, as I demonstrated above, your 70% number is, as you put it, propagandha. I certainly feel that the post-2007 UAW hires aren't being compensated adequately for any industry, and the 40% hourly increase they're seeking is quite reasonable.
This is getting into weasel word territory; you completely ignored the GP observing the contradictions within your own rhetoric, and responded with more rhetoric and a fallacious premise. Being rude isn't helping your unpopular argument to gain more traction.
You led out your initial comment warning about propaganda—it might be worth considering if you fell for propaganda on the other side.