Clinton made a change in the 90s around tax deductibility of salary vs stock compensation and suddenly CEOs were primarily paid in stock. Throw in a easy money Fed which juiced the stock market over the last 20 years and this is the result.
If only there were a company where all the officers and board were paid in stock. Their compensation is based on company success.
That is stupid. As much as he want to gaslight you into thinking there’s supposed to be some sort of relationship between the two jobs and the two figures, there is none.
Just another bullshit Sanders non sequitur.
I have heard this on countless occasions the CEO is like the general of the army. They have to do strategic big picture planning, run the entire company, and know what the trends will be before they happen etc. it’s not easy to do. Small business owners have a tough enough job as it is at their scale but imagine what a small business owner does but for a company that has hundreds or thousands of employees…much larger scale.
Do you know how many CEOs are included in your comp number?
I ask because the average CEO comp per IRS is less than $200k. Obviously there’s a huge difference between the top 100-200 CEOs that make $20+ million and the rest of the CEOs that make a lot less.
TriCkle DoWn EconOmics
People who sit in a board are doing nothing CEOs work hard. Board sit together every 3 month and drink tea. They don’t do anything. We can distribute their money to workers
Omg, ppl are still ignoring economy.
Good CEOs are hard to find, their decisions could cost billions for the investors and the only proof of being a good CEO is… being a good CEO in the past. Yes, demand is high, that’s why they get so much. Start a company, rise it to the success and run as CEO, and you will be paid as much.
What’s next, are we going to discuss why gold miners are making more money despite doing as much as coal miners?
This is always a fun statistic to push out, but it ignores the growth in the size of companies, both directly in the form of having more employees due to global reach, but also indirectly in the form of multi-national supply chains.
The largest companies in the world today, however you want to slice it, sell the products comprised of the labour of tens or hundreds of millions of people. In 1965 a large company would have incorporate the labour of around a million people.
If CEOs are at the top of the pyramid, then as the pyramid gets bigger they’ll get paid more.
Vote to change the system.
Blaming clouds when it rains ignores how weather patterns are formed.
What is the size of the workforce of a corporation in 1965 as compared to the size of the corporation workforce in 2020? What is the difference in revenue?
Complaining about CEO compensation mainly gives financially uneducated some good rage bait. I’m not saying I agree or disagree with CEO compensation. I’m saying it isn’t the problem.
Corporate & CEO pay is indeed through the roof, but greed is not a root cause. Greed didn’t appear overnight after 1965. What happened is the dollar broke down, pensions failed, and the 401k was introduced (1970s.) Fast forward to today, and there are now trillions of dollars flowing into the S&P500 companies – all of it frantically chasing a return so that people can retire some day. The fact that corporate boards think they might eek out a bit more profit with just the right guy person in the CEO spot isn’t terribly surprising, but it is an indicator of just how competitive it’s become.
This was all a natural outcome of taking away others savings/retirement methods and essentially forcing most people to become investors. People used to actually hold dollars, CDs, and bonds, whereas investing used to be niche and risky and it certainly wasn’t something the average person did. Now everybody’s futures hinge on the latest quarterly earnings reports. Blue chip stocks have *become* the money. You can literally send them on Cash App! There are entire industries of analysts, fund managers, heck even Jim Cramer types serving entertainment.
Yes, it’s crazy. No it isn’t just because greed appeared. It’s because everybody has to be an “investor” now and there massive heaps of money piling into stocks because that’s the only reasonable way to save for most people. If there wasn’t so much demand, I highly doubt these obscene salaries could be maintained. We keep throwing trillions at them though, and guess what – they keep going up!
It’s amazing how often this has to be explained: CEO’s aren’t paid to work 351x harder than the average worker. They are paid 351x because they are responsible for a company that brings in a much larger profit than what they are paid. It is about responsibility and results.
CEOs are basically commission based positions.
So let’s talk some balance here.
Your CEO SHOULD be well compensated. Especially a good one. It’s a difficult job that’s more than the parody of 3 martini lunches and afternoons on the golf course. It’s an actual grind and any decision that falls on your desk is a difficult one.
That said…it’s not an exponentially more difficult job compared to a generation ago and a 16.5x relative markup over the median/mean compensation feels excessive.
Much of that comes from the power modern CEOs have in many cases to handpick their boards. You need a partner in your board for the CEO to effectively define AND execute broad strategy, but there are more than a few boards that are simply filled with lackeys.
The board’s job is governance of the organization and many boards rubber stamp whatever the whims of executive management are. Up to and including (wildly excessive) compensation and incentives.
In a perfect world, everyone would maintain their fiduciary discipline for the long-term health of the organization.
But we aren’t in a perfect world.
Elon just tried to get paid 1 million times the average worker or something.
CEOs do so little work that they’re about to be replaced by AI
its not about working 351X times harder its about making 351X more money for your corporation
Harder no, smarter maybe.
Most don’t work. They are scape goats theat get blamed and fired when a company goes to shit.
Hopefully they will “trickle down” some of that money to the less fortunate. Lol jk
Greed is a symptom. The root causes is, Citizens United, and a 2-party political system that relegates 3rd parties to being spoilers.
The one percent have figured out how to play this 18th century democracy. And it won’t be fixed until we have ranked voting or instant runoff, or even runoffs.
Greed is a such a bizarre scapegoat. Why were CEOs so much less “greedy” in 1965? Or perhaps there is some deeper mechanism that has allowed them to get away with the 351x compensation? If so shouldn’t we be focused on this mechanism instead of blaming human nature?
When the company fails , we all have to share the failure , but when its succeeding its only for the upper bracket, We need a system reform!
Their job is to keep everyone else salary low. How we are surprised that the gap is widening?
The logic is flawed. Pay is not about how hard you work. If that’s the case, garbage men would be paid more than some doctors.
Pay is a reflection of supply and demand for that role. Doctor is a lot more in demand due to skill and education (so there’s fewer of them) so they get more.
CEOs and workers are all competitive roles.
I mean I agree CEOs are ridiculously paid and most are terrible anyway. I’m just saying the logic in the tweet is flawed.
Lol at everyone who thinks work = value. The big divide in this country is because people refuse to save and invest….that simple.
Twenty one times is already too much.
Hot take. CEO pay is fine but let’s increase the wages of all the workers so we are back to a 20x ratio. Shareholders can have whatever is left over.
If you’re a CEO of a large corporation, you might have 200,000 employees, and manage 100 of products in dozens of countries around the world. You likely never see your family and kids, if you have any, because you work so much. You have a TON of responsibility, and your board will fire your ass as soon as you slip up
But you still don’t make anywhere near as much an NBA or Soccer player, for playing a game, and no one complains that LeBron makes thousand of times what the lowest paid stadium worker gets
30 comments
Now do the politicians…
They don’t. But incentives matter.
Clinton made a change in the 90s around tax deductibility of salary vs stock compensation and suddenly CEOs were primarily paid in stock. Throw in a easy money Fed which juiced the stock market over the last 20 years and this is the result.
If only there were a company where all the officers and board were paid in stock. Their compensation is based on company success.
That is stupid. As much as he want to gaslight you into thinking there’s supposed to be some sort of relationship between the two jobs and the two figures, there is none.
Just another bullshit Sanders non sequitur.
I have heard this on countless occasions the CEO is like the general of the army. They have to do strategic big picture planning, run the entire company, and know what the trends will be before they happen etc. it’s not easy to do. Small business owners have a tough enough job as it is at their scale but imagine what a small business owner does but for a company that has hundreds or thousands of employees…much larger scale.
Do you know how many CEOs are included in your comp number?
I ask because the average CEO comp per IRS is less than $200k. Obviously there’s a huge difference between the top 100-200 CEOs that make $20+ million and the rest of the CEOs that make a lot less.
TriCkle DoWn EconOmics
People who sit in a board are doing nothing CEOs work hard. Board sit together every 3 month and drink tea. They don’t do anything. We can distribute their money to workers
Omg, ppl are still ignoring economy.
Good CEOs are hard to find, their decisions could cost billions for the investors and the only proof of being a good CEO is… being a good CEO in the past. Yes, demand is high, that’s why they get so much. Start a company, rise it to the success and run as CEO, and you will be paid as much.
What’s next, are we going to discuss why gold miners are making more money despite doing as much as coal miners?
This is always a fun statistic to push out, but it ignores the growth in the size of companies, both directly in the form of having more employees due to global reach, but also indirectly in the form of multi-national supply chains.
The largest companies in the world today, however you want to slice it, sell the products comprised of the labour of tens or hundreds of millions of people. In 1965 a large company would have incorporate the labour of around a million people.
If CEOs are at the top of the pyramid, then as the pyramid gets bigger they’ll get paid more.
Vote to change the system.
Blaming clouds when it rains ignores how weather patterns are formed.
What is the size of the workforce of a corporation in 1965 as compared to the size of the corporation workforce in 2020? What is the difference in revenue?
Complaining about CEO compensation mainly gives financially uneducated some good rage bait. I’m not saying I agree or disagree with CEO compensation. I’m saying it isn’t the problem.
Corporate & CEO pay is indeed through the roof, but greed is not a root cause. Greed didn’t appear overnight after 1965. What happened is the dollar broke down, pensions failed, and the 401k was introduced (1970s.) Fast forward to today, and there are now trillions of dollars flowing into the S&P500 companies – all of it frantically chasing a return so that people can retire some day. The fact that corporate boards think they might eek out a bit more profit with just the right guy person in the CEO spot isn’t terribly surprising, but it is an indicator of just how competitive it’s become.
This was all a natural outcome of taking away others savings/retirement methods and essentially forcing most people to become investors. People used to actually hold dollars, CDs, and bonds, whereas investing used to be niche and risky and it certainly wasn’t something the average person did. Now everybody’s futures hinge on the latest quarterly earnings reports. Blue chip stocks have *become* the money. You can literally send them on Cash App! There are entire industries of analysts, fund managers, heck even Jim Cramer types serving entertainment.
Yes, it’s crazy. No it isn’t just because greed appeared. It’s because everybody has to be an “investor” now and there massive heaps of money piling into stocks because that’s the only reasonable way to save for most people. If there wasn’t so much demand, I highly doubt these obscene salaries could be maintained. We keep throwing trillions at them though, and guess what – they keep going up!
It’s amazing how often this has to be explained: CEO’s aren’t paid to work 351x harder than the average worker. They are paid 351x because they are responsible for a company that brings in a much larger profit than what they are paid. It is about responsibility and results.
CEOs are basically commission based positions.
So let’s talk some balance here.
Your CEO SHOULD be well compensated. Especially a good one. It’s a difficult job that’s more than the parody of 3 martini lunches and afternoons on the golf course. It’s an actual grind and any decision that falls on your desk is a difficult one.
That said…it’s not an exponentially more difficult job compared to a generation ago and a 16.5x relative markup over the median/mean compensation feels excessive.
Much of that comes from the power modern CEOs have in many cases to handpick their boards. You need a partner in your board for the CEO to effectively define AND execute broad strategy, but there are more than a few boards that are simply filled with lackeys.
The board’s job is governance of the organization and many boards rubber stamp whatever the whims of executive management are. Up to and including (wildly excessive) compensation and incentives.
In a perfect world, everyone would maintain their fiduciary discipline for the long-term health of the organization.
But we aren’t in a perfect world.
Elon just tried to get paid 1 million times the average worker or something.
CEOs do so little work that they’re about to be replaced by AI
its not about working 351X times harder its about making 351X more money for your corporation
Harder no, smarter maybe.
Most don’t work. They are scape goats theat get blamed and fired when a company goes to shit.
Hopefully they will “trickle down” some of that money to the less fortunate. Lol jk
Greed is a symptom. The root causes is, Citizens United, and a 2-party political system that relegates 3rd parties to being spoilers.
The one percent have figured out how to play this 18th century democracy. And it won’t be fixed until we have ranked voting or instant runoff, or even runoffs.
Greed is a such a bizarre scapegoat. Why were CEOs so much less “greedy” in 1965? Or perhaps there is some deeper mechanism that has allowed them to get away with the 351x compensation? If so shouldn’t we be focused on this mechanism instead of blaming human nature?
When the company fails , we all have to share the failure , but when its succeeding its only for the upper bracket, We need a system reform!
Their job is to keep everyone else salary low. How we are surprised that the gap is widening?
The logic is flawed. Pay is not about how hard you work. If that’s the case, garbage men would be paid more than some doctors.
Pay is a reflection of supply and demand for that role. Doctor is a lot more in demand due to skill and education (so there’s fewer of them) so they get more.
CEOs and workers are all competitive roles.
I mean I agree CEOs are ridiculously paid and most are terrible anyway. I’m just saying the logic in the tweet is flawed.
Lol at everyone who thinks work = value. The big divide in this country is because people refuse to save and invest….that simple.
Twenty one times is already too much.
Hot take. CEO pay is fine but let’s increase the wages of all the workers so we are back to a 20x ratio. Shareholders can have whatever is left over.
If you’re a CEO of a large corporation, you might have 200,000 employees, and manage 100 of products in dozens of countries around the world. You likely never see your family and kids, if you have any, because you work so much. You have a TON of responsibility, and your board will fire your ass as soon as you slip up
But you still don’t make anywhere near as much an NBA or Soccer player, for playing a game, and no one complains that LeBron makes thousand of times what the lowest paid stadium worker gets