a thoughtful web.
Share good ideas and conversation.   Login or Take a Tour!
CrazyEyeJoe  ·  373 days ago  ·  link  ·    ·  parent  ·  post: No one should be a billionaire

Um... So if I understand you correctly, you're saying that the problem isn't that CEOs are paid too much, but rather that they're asked to do the wrong thing.

First of all, I don't really think the CEO is the problem either, per se. The deeper problem is the way companies are structured, and how the profit motive is seen as the only reason for a company's existence. In the US, it's even part of the law that a company must maximise shareholder profit, which I think it's absolute lunacy. On this point it sounds like we agree.

However, if CEOs continue to receive their outlandish salaries at the expense of the remaining employees of the company, how is that not a problem? It get the impression that you don't think there's any correlation between top executive salaries and those of the remaining employees, but I don't see how you can think that. Within a corporation, the amount of profit quite clearly IS a pie, out of which salaries must be divided.

You used the example of McDonald's earning several billions, while "only" paying their CEO $21m. This is indeed the case for McDonald's, but clearly a certain amount of their budget is allocated to salaries, and if CEOs receive a disproportionate amount of that budget, it has a real effect on their other employees' wages. Furthermore the CEO is NOT the only executive receiving a much higher wage than the lower employees. The average McDonald's executive compensation is $235,641 a year. Accepting ludicrous salaries for executives as a fact of life merely propagates this inequality.

Of course it would be better if companies spontaneously decided to make a better world, and stop focusing exclusively on profits, but what makes you think there's any chance that would ever happen all on its own? And don't you think people in power (i.e. in part CEOs) have any influence on whether or not that happens?

Maybe, for example, limiting executive pay to a certain multiple of the salary of their lowest paid employees is an imperfect solution, and certainly it does nothing to fix the deeper problem of company structure, but it would probably have the effect of raising the lowest salaries. How is this not important in its own right?

You don't like the solutions proposed in this article, I take it. So far, I don't think I've seen any proposed solutions coming from you, so what would you prefer?

I think you're also missing a rather important point of the article; that billionaires also end up with POLITICAL power due to their massive wealth. I personally think that's the most important aspect; these people have enormous power and influence, which is completely democratically illegitimate.