I think it's illogical, unsustainable, and is a major contributor to the topic of this thread, which is the erosion of what has been a mainstay of well-being in this country: the middle-class.

 

I would say there is no correlation between executive pay and this topic.

 

If we want to go the route of some of foreign trade agreements that I would be willing to discuss.

 

If a company continues to hire bad executives or over pays for non performance they won't be in business long or the business will lose market share. That the beauty of capitalism. Having artifical buffers restrict executive pay would do nothing for the issue at hand.

Look back into history. Income inequality never works. Usually turns out bad...really bad.

So to clarify you guys want to regulate through the government how much a company pays their CEO and why they are paid ?

 

Let's ask the government to interfere even more in the private sector. This is an insane notion.

 

Absolutely not. But if a company makes $100 and gives $85 of it to the boss, then that doesn't leave much for the workers, which of course limits the middle class. I'm not saying its wrong, I'm not saying it should be regulated, I'm just pointing out a reason (of many) as to why middle class wage growth has stagnated.

With CEO compensation analysis season in full swing, the AFL-CIO released data this morning stating that American CEOs in 2013 earned an average of $11.7 million–an eye-popping 331 times the average worker’s $35,293.

 

Report: CEOs Earn 331 Times As Much As Average Workers, 774 Times As Much As Minimum Wage Earners - Forbes

 

Interesting kicker quote at the end:

 

“America’s CEOs—as exemplified by the individuals of these companies—are cannibalizing their own consumer base.”

Absolutely not. But if a company makes $100 and gives $85 of it to the boss, then that doesn't leave much for the workers, which of course limits the middle class. I'm not saying its wrong, I'm not saying it should be regulated, I'm just pointing out a reason (of many) as to why middle class wage growth has stagnated.

 

Except you examples exaggerates this situation drastically.

 

Companies are owned by the shareholders , shareholders want long term value growth and dividends . They vote on board who hires the CEO. They vote in their best interest which is their right and put together financial packages to attract the best candidates .

 

What some seem to be implying is a shareholder shouldn't look out for their own interest first.

Except you examples exaggerates this situation drastically.

 

Companies are owned by the shareholders , shareholders want long term value growth and dividends . They vote on board who hires the CEO. They vote in their best interest which is their right and put together financial packages to attract the best candidates .

 

What some seem to be implying is a shareholder shouldn't look out for their own interest first.

 

I exaggerated for effect, but you understand my point. Absolutely the shareholder should look out for their best interest. Otherwise, why invest? The problem becomes, as someone else pointed out, the demand for profits is immediate, and the quickest way to make profit is to reduce cost. So long workers!

With CEO compensation analysis season in full swing, the AFL-CIO released data this morning stating that American CEOs in 2013 earned an average of $11.7 million–an eye-popping 331 times the average worker’s $35,293.

 

Report: CEOs Earn 331 Times As Much As Average Workers, 774 Times As Much As Minimum Wage Earners - Forbes

 

Interesting kicker quote at the end:

 

“America’s CEOs—as exemplified by the individuals of these companies—are cannibalizing their own consumer base.”

 

I'm confused, is their article based on only 5 companies? It certainly reads like it is.

I'm confused, is their article based on only 5 companies? It certainly reads like it is.

 

Here is another link to a follow up article.

 

https://www.aei.org/publication/when-we-consider-all-us-chief-executives-the-ceo-to-worker-pay-ratio-falls-from-3311-to-below-41/

 

Bottom Line: Discussions about “excessive CEO pay” and comparisons to average worker pay are distorted by looking at only an outlier group of the 300-350 CEOs of America’s largest, multinational companies, out of a total of almost 250,000 chief executives nationwide. Of course, many younger, risk-taking CEOs are running early stage startups and tech companies, and probably make even less than the average CEO reported by the BLS, as Scott Drum pointed out to me in a recent email. Further, he commented that “The startup CEOs are usually not in it for the salary in the early years. They’re in it for the big payoff in the long run if things go exceptionally well. If we reduce or limit the size of the Big Payoff, don’t we reduce the number of people trying to get there?”

 

The fact that there are almost 250,000 ambitious CEOs making less than $200,000 today on average who are trying to someday be listed by the AFL-CIO or the Wall Street Journal as one of the top 300-350 highest-paid CEOs is a sign of a dynamic, wealth-generating, job-creating economy. We should applaud the richest 300-350 CEOs as a group of the most successful American business professionals, and not vilify them. And we should keep in mind that the CEO compensation surveys that generate all the media attention are always based on a tiny, elite outlier group, and not representative of the average CEO in America – who earns about as much as the average dentist and less than four times more than the average worker.

I exaggerated for effect, but you understand my point. Absolutely the shareholder should look out for their best interest. Otherwise, why invest? The problem becomes, as someone else pointed out, the demand for profits is immediate, and the quickest way to make profit is to reduce cost. So long workers!

 

First off I'd say again so what it is the business owners right to do so. Now if a business owner only looks at the short term growth and not long term value growth their business will be hurt in the long run.

 

A good business leader understands the emotional roller coaster of short term market volatility and need to weigh that with the long term stability and growth of the organzation.

 

To paint the picture all or most Ceo's care about is short term performance is painting a false narrative.

So it was based on 350 companies? That sounds better as the first article kind of confused me as to their sample group.

First off I'd say again so what it is the business owners right to do so. Now if a business owner only looks at the short term growth and not long term value growth their business will be hurt in the long run.

 

A good business leader understands the emotional roller coaster of short term market volatility and need to weigh that with the long term stability and growth of the organzation.

 

To paint the picture all or most Ceo's care about is short term performance is painting a false narrative.

 

Absolutely. Again, I think you think I'm against the CEOs making money and that is far from the truth. I want a strong, healthy economy with everyone making money. I'm just pointing out potential pratfalls keeping that from happening. And I'm absolutely not an economist and I don't know the answer.

Here is another link to a follow up article.

 

https://www.aei.org/publication/when-we-consider-all-us-chief-executives-the-ceo-to-worker-pay-ratio-falls-from-3311-to-below-41/

 

Bottom Line: Discussions about “excessive CEO pay” and comparisons to average worker pay are distorted by looking at only an outlier group of the 300-350 CEOs of America’s largest, multinational companies, out of a total of almost 250,000 chief executives nationwide. Of course, many younger, risk-taking CEOs are running early stage startups and tech companies, and probably make even less than the average CEO reported by the BLS, as Scott Drum pointed out to me in a recent email. Further, he commented that “The startup CEOs are usually not in it for the salary in the early years. They’re in it for the big payoff in the long run if things go exceptionally well. If we reduce or limit the size of the Big Payoff, don’t we reduce the number of people trying to get there?”

 

The fact that there are almost 250,000 ambitious CEOs making less than $200,000 today on average who are trying to someday be listed by the AFL-CIO or the Wall Street Journal as one of the top 300-350 highest-paid CEOs is a sign of a dynamic, wealth-generating, job-creating economy. We should applaud the richest 300-350 CEOs as a group of the most successful American business professionals, and not vilify them. And we should keep in mind that the CEO compensation surveys that generate all the media attention are always based on a tiny, elite outlier group, and not representative of the average CEO in America – who earns about as much as the average dentist and less than four times more than the average worker.

 

Exactly the average CEO does not make 11 million dollars.

Exactly the average CEO does not make 11 million dollars.

 

I don't want to look for it, but I would like to see the pay ratio of CEO:employees of the thirty constituents of the Dow Jones. I'd bet they are much higher than the average company.

Absolutely. Again, I think you think I'm against the CEOs making money and that is far from the truth. I want a strong, healthy economy with everyone making money. I'm just pointing out potential pratfalls keeping that from happening. And I'm absolutely not an economist and I don't know the answer.

 

I don't see the pitfalls if we look at this on a macro level. We are talking about a very small % of CEO's. Who run multi billion dollar businesses with thousands of employees.

 

The only pitfall I see is putting a cap on attracting the best and brightest minds. The desire to create wealth is what drives innovation the market place.

I don't want to look for it, but I would like to see the pay ratio of CEO:employees of the thirty constituents of the Dow Jones. I'd bet they are much higher than the average company.

 

And those CEO's have much greater responsibility than the average CEO. Muti billion dollar corporations with tens of thousands of employees.