Cap on CEO Salaries

[SoonerTexan]

http://us.cnn.com/2013/11/21/opinion...html?hpt=hp_t4

Here's a interesting one!

I don't agree with it at all. Here's one reason (from the article):

Limiting CEO pay to 100 times the minimum wage would still allow top execs to be millionaires -- they'd earn a maximum wage of about $1.5 million per year, given the current federal minimum of $7.25 an hour, figured for a 40-hour work week. And here's the best part: If the fat cats wanted a pay increase, maybe the best way for them to get it would be to throw political weight behind a campaign to boost the minimum wage.

The top management at my (Fortune 500) company sure isn't working 40 hour weeks. They are essentially on 24/7 and traveling globally. No thank you.

Most of their compensation comes from stock awards anyway, which is probably the best way to do it. (Tie their financial success to the success of the company)

You couldn't pay me any amount to be top management at a company. No freaking way. Actually, I think we villianize the majority of upper level management in this country based on the bad actions of a few. Sure, some are overpaid and aren't good at their jobs...but they usually don't stay in their position if that is the case.

[houseelf]

Nicholas Taleb is my favorite economist. If I were to explain his theory on why executives shouldn't make as much as they do would just eff it up. I'll cut to the chase and offer a quick and dirty
nontechnical response citing Taleb's theories: http://www.nakedcapitalism.com/2011/...ail-banks.html

There is a difference between capitalism and unchecked, unfettered capitalism.

I've said it once around these parts and I'll say it again. The regulatory pendulum needs to swing back the middle. As it stands today, the game is rigged.

ETA--Banking/finance executives are the ones MOST guilty of this government subsidizing on tax payer dollar and the subset I feel most strongly about.

[poky]

Yeah, I agree with Kelly, and the article. Just because YOU could never be paid enough to do what they do doesn't mean the ones that do it should get paid completely obscene amounts for it.

[SoonerTexan]

Ill have to read that Kelly.

Actually banking/finance is exactly what I was thinking of when I mentioned the bad behavior of a few in my original post. I'm sure my own experience has colored my perceptions. I work for a relatively fiscally conservative company that you won't find in the news often. However, my family has been lpersonally burned. I ended up in DFW in the first place because my dad worked for WorldCom.

I get frustrated because I think people have a very skewed view of corporations and how many (especially outside the big names) are actually run. And then they bitch when their investments suffer or layoffs happen. You don't get to play it both ways...

[bobk]

I agree with the article about Wall Street. The Feds should regulate the hell out of "too big to fail" companies.

Not sure about capping CEO pay with a ratio or maximum number. Would the company get to decide what becomes of the extra cash? And why are CEOs the only ones targeted? How about the obscene salaries of top athletes and entertainers? It sounds like a political and regulatory nightmare that would create more problems than it claims to solve.

[Pollyanna]

And why are CEOs the only ones targeted? How about the obscene salaries of top athletes and entertainers? It sounds like a political and regulatory nightmare that would create more problems than it claims to solve.

Lol, that's for sure! And you know that's a very short hop skip and a jump to capping physician salaries

Either way, I think most CEOs earn every penny they make.

[SuzySunshine]

There is definitely not enough regulation in a lot of industries these days however I think capping CEO salaries is not the answer. A company can do what they want with their profit, they're a company - whether they're public and report to their shareholders or private and report to no one, they can choose to pay whoever in their company whatever they want.

I think Costco is a great example of this - they pay their store employees around $20/hour with benefits - for RETAIL! And the CEO "only" makes about $4M and thats his complete package, most of which is stock options - his actual salary is less then a million. They do what they do well and they take care of their employees in the process.

[SoonerTexan]

I think this bothers me so much because I feel like it comes from the same place as "doctors are paid too much." A willingness to believe X job (usually one we understand because it is ours or close to us) is harder/more valuable than another because we don't know all the dirty details of what the other involves.

[TulipsAndSunscreen]

This will make us less competitive in a global marketplace and ensure that company HQs are located elsewhere. It won't happen overnight but if you start a company, you will locate or move your HQ to a place where you can attract the top talent from a CEO perspective. That will hurt the US tax wise because you pay taxes based on complicate accounting including where your money is banked, etc. Tons of money earned in the US is already banked offshore to avoid taxes. And you see this is Europe where many companies (I know it from Pharma best) move their HQs to Switzerland or tax purposes while keeping most of operations in their countries of origin.


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[OrionGrad]

I think this bothers me so much because I feel like it comes from the same place as "doctors are paid too much." A willingness to believe X job (usually one we understand because it is ours or close to us) is harder/more valuable than another because we don't know all the dirty details of what the other involves.

This was my initial thought, too.

[PrincessFiona]

I think this bothers me so much because I feel like it comes from the same place as "doctors are paid too much." A willingness to believe X job (usually one we understand because it is ours or close to us) is harder/more valuable than another because we don't know all the dirty details of what the other involves.

That has already happened .... and doctors are going to be earning much less in the coming years, with nurse practitioners and PAs who are cheaper stepping in to primary care (and probably many specialties). Many of us out in practice are already seeing and feeling the reality of decreases in salary. What really bugs me is that I rarely see discussions about that because it becomes so politicized with people either being for or against obamacare.

I think CEO salaries are out of touch with reality. They have tough jobs, but frankly, they aren't worth that much. When I hear about companies where the CEO gives himself a mult-million dollar raise while cutting benefits (insurance) for employees, I just think there is something wrong. I don't have a fancy argument to back myself up. I remember when my dad worked for American Airlines as a pilot, the pilots accepted a 20% pay cut in order for the company to avoid bankruptcy and as soon as the ink was dry, the upper management was given huge bonuses.

I personally think that when the CEO is making more than 250 times the amount of the worker supporting the company something is wrong. It sickens me that companies like Wal-Mart and McDonalds can't provide living wages for employees and that their advice to employees is to give back Christmas gifts, get a second job, or they offer up food collection bins for employees. Time to look at minimum wage.

Kris

[bokelley]

My grandfather was an exec for a large company. He didn't work more hours than anyone else. I remember him telling me when I was older I don't get paid more for my work because I worker harder than anyone else, I get paid more because my hard decisions effect everyone in the company.

That really changed my perspective on things. When you are in charge of a company you have those peoples jobs in your hand. That is a responsibility that can not be seen by work hours.

[diggitydot]

I can see both sides of the issue.

FWIW, I think companies that voluntarily tie executive pay to that of their lowest paid employees are fascinating, like Dr. Bronner's Magic Soaps.

[Rapunzel]

I think capping anyone's salary is ridiculous and erodes the incentive for talented individuals to participate in the economy. How many John Galts will just walk away?

[PrincessFiona]

Sky should be the limit after paying employees living wages and offering healthcare...