July 4, 201511 yr .... I'll accept if I'm off-base here. I'm not an expert. But, I think if I were off the mark then there would be a strong correlation between executive compensation and company performance (not stock price) that justifies their explosion in compensation over the last several decades. I can't find any evidence there. You are not off-base at all. Cxx compensation - especially salary snd straight bonus can be a head scratcher in a lot of case when it is compared to company performance. This is the main reaon executive compensation usually has a stock component to it in a public company. It is supposed to align the CEO and C-level team motives with that of the owners of the company - the stockholders. But then executives stock portion of compensation is based on stock options or perferred stock or discounted stock price then an executive can make a lot of money while the owners get little or nothing in way of dividends or increased stock price. Stock price is the main driver in determining if the company is reaching its mission - generate wealth for its owners. Dividends do that also - but they are not what most people look for in investing. Though companies with good dividends are usually good companies in general. The 'traditional' manner if raising stock price is through revenue growth or top-line revenue increase. And that would seem be a goal in most companies. But the fact is the economy is not really growing as the pump-and-dumpers want to make investors believe. It is certainly not the 1990s in terms of growth at the top-line or in stock prices. So companies do have to resort to cost cutting to increase 'margins' - aka 'gross profit'; aka 'net profit', aka NEBT (Net Earnings Before Taxes), and aka 'earnings' (the term most loved by CNBC and Fox Biz talking heads). Notice I pick on public companies - publicly traded companies. They are subject to the quarter to quarter expectations of the NYSE/NASDAQ cabal. Private companies are less subject to this. An interesting thing is when a venture capital group acquires a public company, or a spin off - as was the case with Lexmark. The venture capital group will usually get a good, solid strong executive and senior management team in place without worrying about Wall Street during that phase. They will then get the strategy in place and reform the company. The goal is take something with high potential or more pontential than it was and revitalize it. Unfortunately the the image of a venture capitalist has been created by Gordon Gecko and who ever Richard Gere played in Pretty Woman. But usually venture capital firms are interested in revitalizing and rebuilding companies if they take them over. Over-compensated CEOs are all over the place. But if they are good the board of a company wants to keep them they will receiver higher and higher compensation. And if a company is looking for new CEO to replace one who under performed they are willing to pay heavily for them. These circumstances are the drivers to CEO compensation. It is not just simple greed.
July 4, 201511 yr So let's address some of the points being missed IMO. Habib and others are 100% correct that the pay plans of CEOs CAN lead to short-term decisions. If you are of the belief that the CEO will simply cut labor costs at the expense of the middle class workers in order to maximize his/her package then why do you think he doesn't cut ALL of the labor costs? Correct. It would impact sales/service. So that tells us there is a balance. If a CEO an cut EXCESS labor without impacting sales not only can he/she do that they SHOULD do that. If you can do that without negative impacts on the bottom line then you have too much labor to begin with. Secondly, if you lose your job then it means you are expendable. That's on you. You do not provide enough value to your employer. That can be tough to hear but that's reality. So if your skills are not in demand you are not going to make a lot of money. There are too many people that do what you do. As always in life, it's about leverage. If your skills are like millions of others then you have no real leverage which means your income will reflect that in most cases. This gets back to my contention that technology is driving the deflated wages in the middle class. If a business can send info to lower-cost accountants in India and get the same performance they will in many cases. If a piece of machinery is less expensive than paying employees who come with employer taxes and benefits and they never call in sick to work or take vacation companies are going to take that route. You can't have 1970s skills in 2015. CEO pay isn't keeping you from earning a better living. You are.
July 4, 201511 yr Author So let's address some of the points being missed IMO. Habib and others are 100% correct that the pay plans of CEOs CAN lead to short-term decisions. If you are of the belief that the CEO will simply cut labor costs at the expense of the middle class workers in order to maximize his/her package then why do you think he doesn't cut ALL of the labor costs? Correct. It would impact sales/service. So that tells us there is a balance. If a CEO an cut EXCESS labor without impacting sales not only can he/she do that they SHOULD do that. If you can do that without negative impacts on the bottom line then you have too much labor to begin with. Secondly, if you lose your job then it means you are expendable. That's on you. You do not provide enough value to your employer. That can be tough to hear but that's reality. So if your skills are not in demand you are not going to make a lot of money. There are too many people that do what you do. As always in life, it's about leverage. If your skills are like millions of others then you have no real leverage which means your income will reflect that in most cases. This gets back to my contention that technology is driving the deflated wages in the middle class. If a business can send info to lower-cost accountants in India and get the same performance they will in many cases. If a piece of machinery is less expensive than paying employees who come with employer taxes and benefits and they never call in sick to work or take vacation companies are going to take that route. You can't have 1970s skills in 2015. CEO pay isn't keeping you from earning a better living. You are. I buy into most of what you and others are saying that it's not only CEO pay that keeps middle class workers' pay down. However, we are staring at a nearly half century devaluation of our primary workforce. We can say technology/ outsourcing/ gremlins is getting some of these jobs, but this is the largest section of our workforce, so someone is there working and earning a lot less than what they are worth. Is the suggestion from our society going to be "work harder" ( they are on salary and can't make more ) or "get more education" (Already have one degree that got them the job) or "find another job" (you mean another middle class job that is nearly the same)? IMO middle classers don't expect to make a million dollars, but they do expect their wages to grow at the rate of inflation. Our government is just as guilty as businesses, so if they are going to do something those in charge may need to start there, and then begin look at the private sector.
July 4, 201511 yr So let's address some of the points being missed IMO. Habib and others are 100% correct that the pay plans of CEOs CAN lead to short-term decisions. If you are of the belief that the CEO will simply cut labor costs at the expense of the middle class workers in order to maximize his/her package then why do you think he doesn't cut ALL of the labor costs? Correct. It would impact sales/service. So that tells us there is a balance. If a CEO an cut EXCESS labor without impacting sales not only can he/she do that they SHOULD do that. If you can do that without negative impacts on the bottom line then you have too much labor to begin with. Secondly, if you lose your job then it means you are expendable. That's on you. You do not provide enough value to your employer. That can be tough to hear but that's reality. So if your skills are not in demand you are not going to make a lot of money. There are too many people that do what you do. As always in life, it's about leverage. If your skills are like millions of others then you have no real leverage which means your income will reflect that in most cases. This gets back to my contention that technology is driving the deflated wages in the middle class. If a business can send info to lower-cost accountants in India and get the same performance they will in many cases. If a piece of machinery is less expensive than paying employees who come with employer taxes and benefits and they never call in sick to work or take vacation companies are going to take that route. You can't have 1970s skills in 2015. CEO pay isn't keeping you from earning a better living. You are. Saying that "CEO pay isn't keeping you from earning a better living -- you are" is elitist. Lot of people drawing unemployment today through no fault of their own. CEO pay by itself isn't a deal-breaker, but it's emblematic of the larger evolution of business that has resulted in stagnation of wages for millions of middle-class workers. Just ask public school teachers in Kentucky whether their pay raises the past five to seven years have kept pace with the cost of living.
July 4, 201511 yr Saying that "CEO pay isn't keeping you from earning a better living -- you are" is elitist. Lot of people drawing unemployment today through no fault of their own. CEO pay by itself isn't a deal-breaker, but it's emblematic of the larger evolution of business that has resulted in stagnation of wages for millions of middle-class workers. Just ask public school teachers in Kentucky whether their pay raises the past five to seven years have kept pace with the cost of living. Elitist? Dude, I'm from Burlington, KY. Ain't no "elitism" involved. Blame the govt all you want but it avoids the truth. If your skills are not valued then you get what the market bears. It's that simple. Being laid off sucks. Wreaks havoc occasionally. Who do we blame for that? God bless KY teachers but just like every other worker in America no one is forcing them to do what they do. Again, it boils down to leverage. Teachers in most cases simply do not have it. If they did we as taxpayers would agree to pay them more. We do not. I speak the truth with no emotion attached. I'm not making judgements on anyone. I'm STRICTLY pointing out reality instead of blaming "the man."
July 4, 201511 yr However, we are staring at a nearly half century devaluation of our primary workforce. We can say technology/ outsourcing/ gremlins is getting some of these jobs, but this is the largest section of our workforce, so someone is there working and earning a lot less than what they are worth. I You earn what we as a society/economy says you are worth. It can't be any simpler than that.
July 4, 201511 yr Elitist? Dude, I'm from Burlington, KY. Ain't no "elitism" involved. Blame the govt all you want but it avoids the truth. If your skills are not valued then you get what the market bears. It's that simple. Being laid off sucks. Wreaks havoc occasionally. Who do we blame for that? God bless KY teachers but just like every other worker in America no one is forcing them to do what they do. Again, it boils down to leverage. Teachers in most cases simply do not have it. If they did we as taxpayers would agree to pay them more. We do not. I speak the truth with no emotion attached. I'm not making judgements on anyone. I'm STRICTLY pointing out reality instead of blaming "the man." Where one lives has no bearing on elitist viewpoints proffered in print. Your "that's on you" quip in post 77 is elitist. Sometimes people lose their jobs because they screw up; sometimes they are forced to stand in the unemployment line through no fault of their own. To suggest that middle-class malaise is a result of worker deficiencies vs. a profound change in business practices (which I personally witnessed the last two decades of my working life) is nonsense.
July 4, 201511 yr Where one lives has no bearing on elitist viewpoints proffered in print. Your "that's on you" quip in post 77 is elitist. Sometimes people lose their jobs because they screw up; sometimes they are forced to stand in the unemployment line through no fault of their own. To suggest that middle-class malaise is a result of worker deficiencies vs. a profound change in business practices (which I personally witnessed the last two decades of my working life) is nonsense. Never said it was an either/or. I can't make it any simpler. Those who are not making the wages they think are fair or are in a job they do not like have to accept that it's on them. We all make choices. "That's on you" is simply a truth and is not elitist. Those that think it's elitist also blame CEO pay.
July 4, 201511 yr Never said it was an either/or. I can't make it any simpler. Those who are not making the wages they think are fair or are in a job they do not like have to accept that it's on them. We all make choices. "That's on you" is simply a truth and is not elitist. Those that think it's elitist also blame CEO pay. No, CEO pay is emblematic as well as part of the larger problem. And, please, get out of the habit of purporting to know "the truth."
July 4, 201511 yr No, CEO pay is emblematic as well as part of the larger problem. And, please, get out of the habit of purporting to know "the truth." And that is?
July 4, 201511 yr Just ask public school teachers in Kentucky whether their pay raises the past five to seven years have kept pace with the cost of living. The Fayette County salary schedules goes from around $40,000 - 0 years, bachelors to over $80,000 for over 20 years with a PHD. That is for 191 days of service where in the private sector the usual number of work days is over 220. I am not sure what the increase have been but those are numbers that are better than almost anything in the private sector. I know people who have MBAs and a PHDs and they are taking jobs a lower rates than this. I also checked the previous (not newly hired) Fayette superintendent salary - over $250,000. I assume principles are in between. No doubt teaching is not easy but the salary is not bad. Not bad at all compared to current private sector new hire salaries (most grads would love $40K starting if they can find it) and a top scale of over $80,000 for do the same job with some years and additional sheepskin is not bad at all.
July 4, 201511 yr So let's address some of the points being missed IMO. Habib and others are 100% correct that the pay plans of CEOs CAN lead to short-term decisions. If you are of the belief that the CEO will simply cut labor costs at the expense of the middle class workers in order to maximize his/her package then why do you think he doesn't cut ALL of the labor costs? Correct. It would impact sales/service. So that tells us there is a balance. If a CEO an cut EXCESS labor without impacting sales not only can he/she do that they SHOULD do that. If you can do that without negative impacts on the bottom line then you have too much labor to begin with. Secondly, if you lose your job then it means you are expendable. That's on you. You do not provide enough value to your employer. That can be tough to hear but that's reality. So if your skills are not in demand you are not going to make a lot of money. There are too many people that do what you do. As always in life, it's about leverage. If your skills are like millions of others then you have no real leverage which means your income will reflect that in most cases. This gets back to my contention that technology is driving the deflated wages in the middle class. If a business can send info to lower-cost accountants in India and get the same performance they will in many cases. If a piece of machinery is less expensive than paying employees who come with employer taxes and benefits and they never call in sick to work or take vacation companies are going to take that route. You can't have 1970s skills in 2015. CEO pay isn't keeping you from earning a better living. You are. Before I open my first beer today I want to agree with you here. As a matter of personal/practical advice there's no argument that people shouldn't sit on their hands and hope for the best. Anyone would do well to heed what you say here. My posts in this thread aren't to "whine" that some people are getting passed by, but that as a matter of the overall health of the American economy I don't think the direction recent trends are taking us are good or are only going to affect the people who didn't learn a new skill. I think the financial crisis of 2007/8 was the culmination of a lot of these factors (not entirely, but a relevant factor). I'm somewhat hypocritical here because I agreed with the bailouts, but had there not have been we would have seen much more perilous repercussions from it. Most people agreed with the bailouts because we were staring over the precipice of the absolute unknown. As such, there doesn't appear to have been much of a "course correction" and I don't think that bodes well.
July 4, 201511 yr My posts in this thread aren't to "whine" that some people are getting passed by, but that as a matter of the overall health of the American economy I don't think the direction recent trends are taking us are good or are only going to affect the people who didn't learn a new skill. We are in complete agreement. Everyone benefits when the middle class is strong. It's the "how do we get there" that we can't seem to get a handle on currently.
July 5, 201511 yr So let's take a look at that Fayette Super position. If that is a publicly traded company with 5800 employees, working out of 50 facilities, and serving 40,000 clients each day, and gross receipts of $450,000,000, is the CEO (Superintendent) making $250k? Not a chance. So given the argument that most seem ok with what a CEO makes, would those same folks be ok paying a government employee with the same span of control similar salaries/ compensation packages? Not saying any answer is right or wrong. Just want to see how you feel about such compensation if they are footing the bill. Edited July 5, 201511 yr by ColdHard
July 5, 201511 yr So let's take a look at that Fayette Super position. If that is a publicly traded company with 5800 employees, working out of 50 facilities, and serving 40,000 clients each day, and gross receipts of $450,000,000, is the CEO (Superintendent) making $250k? Not a chance. So given the argument that most seem ok with what a CEO makes, would those same folks be ok paying a government employee with the same span of control similar salaries/ compensation packages? Not saying any answer is right or wrong. Just want to see how you feel about such compensation if they are footing the bill. Fayette County Schools generate Revenue of 450 million ?
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