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Author Topic:   Executive Salaries and Corn Flakes
Grizz
Member (Idle past 5471 days)
Posts: 318
Joined: 06-08-2007


Message 1 of 19 (461491)
03-25-2008 8:25 PM


In order to prevent a topic derailment in another thread, I am posting this item for discussion here.
...............................................................
I was reading a story on CNN about a guy who allegedly auctioned off a Corn Flake for $500. He says when he went to pour milk on his cereal, he saw the face of Mary staring up at him from one of the flakes. According to the story, he sold it for $500 to a Nun in Sweden. I don't know if the story is true, but let's assume it is and lets assume the guy was being honest when he thought he actually saw an image of Mary on a Corn Flake.
Our first response is to laugh and try to figure out what kind of sucker would purchase something the average Joe wouldn't fork over a penny for. It doesn't matter if you think it was worth $500, however -- someone obviously thought it was. Did the guy deserve the $500? Someone out there said yes. Also, the money didn't materialize out of nowhere, it already existed. He didn't get money for free -- he exchanged it for goods that were in demand by a buyer.
We say the same about Executive salaries and to us they seem ridiculously excessive, and to me they are. The fact is, however, that is what the corporations are willing to pay the executives to run the company. Again, it is supply and demand. That's the current asking price for a CEO. Without the salary, no CEO. The money to pay the salary does not materialize out of nowhere and they are not getting it for free. Overpriced bell hops? Perhaps. But just like the $500 Corn Flake, a commodity was exchanged in trade.
I am not defending excess and I am far from wealthy -- I am making ends meet as I finish up Grad School. I don't think either scenario above is a fair exchange but again it's now what you or I think -- it's what the buyer and seller think. I just realize there is nothing we can really do about these things. That's the market value of a CEO or a corporate executive -- or a Corn Flake inscribed with an image of Mary.

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Minnemooseus
Member
Posts: 3941
From: Duluth, Minnesota, U.S. (West end of Lake Superior)
Joined: 11-11-2001
Member Rating: 10.0


Message 2 of 19 (461496)
03-25-2008 9:08 PM
Reply to: Message 1 by Grizz
03-25-2008 8:25 PM


The Stinking Rich
Re: The $500 corn flake - Unless such is a charitable donation to a worthy cause, to me it's a sign that someone has too much money and (perhaps ) should be paying higher taxes.
Re: Business executives salaries being excessive - The question is, to what degree is a variety of cronyism happening?
And what stands out to me as being even worse is the retirement "parting gifts". A CEO can get canned for poor performance (his/her or the companies?) and get a multi-million dollar going away present, seemingly fully at the option of the board of directors. An extreme(?) example (no, I'm not supplying a link) is the story of the recently retired CEO/President or whatever of Exxon/Mobile. I heard he got a $400 million parting gift, above and beyond whatever the regular retirement benefits were. This may be legal, but I sure can't see it as being moral.
There, I've fired what will probably be my only shot in this topic.
Moose

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teen4christ
Member (Idle past 5799 days)
Posts: 238
Joined: 01-15-2008


Message 3 of 19 (461502)
03-25-2008 9:27 PM
Reply to: Message 1 by Grizz
03-25-2008 8:25 PM


Regarding CEOs, sport atheletes, celebs, etc., while it is perfectly legal for them to have such high salaries, I don't think it is moral, especially when there are so many people in the world that have to watch their children starve to death on a daily basis.
This reminds me of Princess Diana. I had just started middle school back when her face was on the news 24/7. I remember having a conversation with a friend of mine who was a big fan of the princess.
He went on and on and on how she was the most generous person in the world and that she ought to be saintified and all of that. What I had to say to him was that there was nothing noble about taking a tour of the world and that she were spending more money on her dresses, daily makeup, and parties than all her charity money put together. His response was, and I actually remember every word, that "it was her money, she could do whatever she want with it."
Yes, it was her money and she had every right to do whatever she wanted with the money. But spending hundreds of thousands of dollars each day on makeup and dresses while proclaiming to be a saint?
Part of being a follower of Christ is you care not because it is written somewhere in the bible but because you really really care from the bottom of your heart. I dare say that even if tomorrow I find out that God does not exist and had never existed, I would still continue to care. It's very disappointing to see so many Christians nowadays defending evangelical leaders like President Bush who got filthy rich by taking full advantage of the legal system. And not just evangelical leaders, but also other people who got very very rich off of exploiting foreign workers. If Christians in this country really care from the bottom of their hearts, they'd worry less about non-issues like gay marriage and who Britney Spears slept with last night and start focusing on the human right violations by American corporations on third world workers. If they really truly care about Christ's teachings, they would worry less about a corn flake and more about eliviating corruptions within the church.
Anyway, that's my rant for the day.

This message is a reply to:
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Replies to this message:
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LouieP
Junior Member (Idle past 5841 days)
Posts: 12
From: Schererville, IN
Joined: 01-02-2008


Message 4 of 19 (462132)
03-31-2008 2:04 PM
Reply to: Message 3 by teen4christ
03-25-2008 9:27 PM


there is no fact when it comes to value.
value is an opinion and in 99% of cases it is in the eye of the beholder.
if So-n-So corporation feels that the CEO is worth 10million a year, then that is what he gets. what if this single man made the corporation 500million that year. you can bet your butt i wouldn't mind giving him that 10 million either.

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Rahvin
Member
Posts: 4032
Joined: 07-01-2005
Member Rating: 9.2


Message 5 of 19 (462147)
03-31-2008 5:31 PM
Reply to: Message 4 by LouieP
03-31-2008 2:04 PM


there is no fact when it comes to value.
value is an opinion and in 99% of cases it is in the eye of the beholder.
The poorer a person is, the more value each dollar will hold. That is a fact.
if So-n-So corporation feels that the CEO is worth 10million a year, then that is what he gets. what if this single man made the corporation 500million that year. you can bet your butt i wouldn't mind giving him that 10 million either.
It's perfectly legal to do so. But of the ethics of paying a CEO $10 million, while the average employee makes $50,000 or less? Didn't the employees do at least as much as the CEO to make the corporation that $500 million?
I keep hearing all of these catchly little moralizers like "there is no "I" in teamwork," and then the CEO is somehow given vastly disproportionate credit for what was a team efort. I certainly don't mind the leader of the company being paid more than the other employees, but the gigantic gap between employee salaries and executive salaries has been growing at a disturbing rate.
It's particularly disturbing when a CEO who has driven a company into the ground is given a multi-million dollar severance package.
But even in circumstances where a company makes a great deal of money, why is there such a massive disparity between the salaries of the employees, who research, formulate, and implement the plan, and the CEO, who helps decide on the plan?
Let's think about this:
quote:
The average CEO of a major corporation received $9.84 million in total compensation in 2004, the AFL-CIO said.
Business Week magazine showed CEO pay gains at an average of 11.3% between 2004 and 2005.
The average employee saw a raise of 2.9% to a whopping $33,000 per year.
That's a pretty huge gap.
The problem is that this worsens the overall income gap within a nation. The middle-class is changing significantly, as the gap between the poverty line and the extremely wealthy grows.
How can anyone possibly say that a CEO is receiving a "fair wage" while the average employee receives 0.33% of the CEO's wage, and the pay increase is only about 26% of the increase CEOs receive?!
That wasn't a typo. The average corporate employee from 2004 to 2005 made one third of one percent of the average CEOs salary, and received only a quarter of the raise the average CEO received.
There's no "I" in "teamwork," indeed.
From the New York Times in 2007:
quote:
The new data also shows that the top 300,000 Americans collectively enjoyed almost as much income as the bottom 150 million Americans. Per person, the top group received 440 times as much as the average person in the bottom half earned, nearly doubling the gap from 1980.
Income gaps like this are, frankly, insane. I'm not promoting Communism or Robin Hood-esque wealth re-distribution, but massive income gaps and huge differences in wealth distribution destroy civilizations.
Your comment that CEOs should be paid an amount that reflects their value to a company is completely true - but is that what's actually happening? It seems to me that, looking at all of the numbers, the pay is completely disproportionate, and completely ignores all of the hard work done by the other employees of the company.

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teen4christ
Member (Idle past 5799 days)
Posts: 238
Joined: 01-15-2008


Message 6 of 19 (462208)
04-01-2008 3:12 PM
Reply to: Message 4 by LouieP
03-31-2008 2:04 PM


To add onto what Rahvin said, just think of ENRON and other companies that were driven right down into the ground by CEO's and executives. While the companies were going out of bussiness and the average employee was receiving the bad news that he will not be able to "put food on his family", the wages and "earnings" of the executives and CEOs were several times higher than what those companies were receiving in profits.
No, I am not advocating communism. No, I am not advocating the redistribution of wealth Robin Hood style. I am, however, advocating we as a society see through all the bollocks that company executives have fabricated for us and try to see the increasing income gap as not only a societal problem but also a human right issue.
As Rahvin said, the poorer the person the more a single dollar is worth to him. In fact, being a poor college student, I found a dime the other day and valued it. When a company goes belly up, who do you think will suffer more, the average employee or the executives? Just think of it this way, when it comes to it, the executives could just retire to their own private islands and cry about their bussiness failures while the average employee has to try to find another way to "put food on his family".

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Phat
Member
Posts: 18262
From: Denver,Colorado USA
Joined: 12-30-2003
Member Rating: 1.1


Message 7 of 19 (462214)
04-01-2008 3:23 PM
Reply to: Message 1 by Grizz
03-25-2008 8:25 PM


Nun The Worse For Wear
I did not realize that nuns had that much pocket change!
Perhaps the good Sister bought it out of fear that it would otherwise be exploited. She may have enjoyed a simple communion with said flake and ended it right then and there!

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Phat
Member
Posts: 18262
From: Denver,Colorado USA
Joined: 12-30-2003
Member Rating: 1.1


Message 8 of 19 (462215)
04-01-2008 3:25 PM
Reply to: Message 6 by teen4christ
04-01-2008 3:12 PM


Cap'n Crunch
"put food on his family"?
Anyway, all typos aside, I think that there should be some sort of regulatory cap on an executives potential earning capacity.
Perhaps Ten Million Dollars a year is fair.

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Rahvin
Member
Posts: 4032
Joined: 07-01-2005
Member Rating: 9.2


Message 9 of 19 (462219)
04-01-2008 3:46 PM
Reply to: Message 8 by Phat
04-01-2008 3:25 PM


Re: Cap'n Crunch
"put food on his family"?
Anyway, all typos aside, I think that there should be some sort of regulatory cap on an executives potential earning capacity.
Perhaps Ten Million Dollars a year is fair.
It's not a typo. It's a rather amusing quote from our Commander in(ept) Chief. He's not so good with the whole "public speaking" thing.
As for executive salary caps, I'd put it as a direct percentage of the average employee's salary. No executive shall make more than 2000% of the average employee's salary at that particular company. This encourages higher living wages for all employees, but still leaves room for lower-paid unskilled positions (and ensures that they are more likely to receive a wage above the poverty line, as well).
If the average employee makes 33,000 per year, the CEO could make up to 660,000 per year. The CEO is still very wealthy, and makes vastly more money than his average employee, but the income gap is not so wide as to create a real aristocracy (which is close to what we have in the US at this point). The CEO can make more money by paying his employees better.
To use another Bush-quote, it would encourage the CEO to "make the pie higher."
When people seriously suggest that a person deserves to make 10,000,000 per year while paying the employees [i]one third of one percent/i of that one person's salary, it makes me physically ill. A team of 10 people can design a new car, see sales skyrocket...and receive a handsome 100,000 bonus if they're lucky on top of their normal salaries, while the CEO who did almost nothing claims that he "deserves" a 10,000,000 dollar salary for what his team of engineers did.
I know, it sounds like communism - "the subjugation of the proletariat" and all that. Well, the commies are right about that - unrestricted capitalism does tend to abuse the hell out of the common worker. The answer is to identify the self-destroying facets of capitalism (like insane income gaps) and put government controls on them so that the system can remain stable.

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Replies to this message:
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teen4christ
Member (Idle past 5799 days)
Posts: 238
Joined: 01-15-2008


Message 10 of 19 (462252)
04-01-2008 9:51 PM
Reply to: Message 8 by Phat
04-01-2008 3:25 PM


Re: Cap'n Crunch
Phat writes
quote:
"put food on his family"?
Anyway, all typos aside,
Have you been living under a rock?

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 Message 8 by Phat, posted 04-01-2008 3:25 PM Phat has replied

Replies to this message:
 Message 11 by Phat, posted 04-02-2008 2:40 AM teen4christ has replied

  
Phat
Member
Posts: 18262
From: Denver,Colorado USA
Joined: 12-30-2003
Member Rating: 1.1


Message 11 of 19 (462270)
04-02-2008 2:40 AM
Reply to: Message 10 by teen4christ
04-01-2008 9:51 PM


Rock and Roll
teen4christ writes:
Have you been living under a rock?
I never pay much attention to what Bush does any more.
It appears from a quick search of his quotations that he is even dumber than I thought, though.
BTW what sort of salary cap would you suggest that the CEO's have?

"All that we call human history--money, poverty, ambition, war, prostitution, classes, empires, slavery--[is] the long terrible story of man trying to find something other than God which will make him happy."--C.S.Lewis
* * * * * * * * * *
“The world has achieved brilliance without wisdom, power without conscience. Ours is a world of nuclear giants and ethical infants.”--General Omar Bradley
* * * * * * * * * * * * * * * * * * *
"The free man owns himself. He can damage himself with either eating or drinking; he can ruin himself with gambling. If he does he is certainly a damn fool, and he might possibly be a damned soul; but if he may not, he is not a free man any more than a dog." -GK Chesterson

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Rrhain
Member
Posts: 6351
From: San Diego, CA, USA
Joined: 05-03-2003


Message 12 of 19 (462279)
04-02-2008 4:47 AM
Reply to: Message 1 by Grizz
03-25-2008 8:25 PM


What you describe, Grizz, is one of the problems of runaway capitalism. With everyone wishing to be "above average," the pressure to continually push for more and more runs away.
This is why most capitalistic economies have put regulations on it. How to best handle this particular issue of runaway capitalism, though, is a very interesting question. The simplistic idea of limits on salaries doesn't seem quite right, but that isn't the only possible response. If economic regulations make it unwise to pay top executives such exorbitant salaries, then companies will reduce the pay because of the economics, not because it is illegal to do so.

Rrhain

Thank you for your submission to Science. Your paper was reviewed by a jury of seventh graders so that they could look for balance and to allow them to make up their own minds. We are sorry to say that they found your paper "bogus," specifically describing the section on the laboratory work "boring." We regret that we will be unable to publish your work at this time.

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Grizz
Member (Idle past 5471 days)
Posts: 318
Joined: 06-08-2007


Message 13 of 19 (462379)
04-02-2008 6:48 PM
Reply to: Message 9 by Rahvin
04-01-2008 3:46 PM


Re: Cap'n Crunch
As for executive salary caps, I'd put it as a direct percentage of the average employee's salary. No executive shall make more than 2000% of the average employee's salary at that particular company. This encourages higher living wages for all employees, but still leaves room for lower-paid unskilled positions (and ensures that they are more likely to receive a wage above the poverty line, as well).
Hi,
There are simple answers to the problem of economic disparity but no simple AND practical answers. This suggestion would certainly seem like a simple and practical solution that addresses the gap in compensation but it simply would not work as a practical remedy, for a number of reasons. Let's start with what we all know - Corporations exist to make a profit. Let's then assume there was a regulation that declared that the individual salaries of the executive officers must not exceed a specified multiple of the average employee salary within the corporation. What would happen?
Would the board of directors convene to authorize raising the salary across the board in order to keep the CEO salary at it's current base prior to regulation, or would they simply lower the CEO salary? As stated, the goal of any Corporation is to maximize profits. With this goal in mind, consider a corporation with 20,000 employees, Would it be more profitable to simply lower the CEO salary from say $10M to $5M or increase the total payroll by $20M to meet the average requirement? No answer is needed here.
Unless one were to introduce legislation that not only regulates the officer salary but also requires a boost in all employee salaries, the action does nothing practical but increase the corporate profit by $5M. With the goal of profit in mind, why would any corporation adjust the overall salary instead of just lowering the CEO wage? It's not like the CEO would refuse to work --they would have no choice, as all corporations would now have this requirement. You would have accomplished nothing in achieving the goal of adding income to the bottom tiers. What results is simply lowering the market value of the CEO while failing to increase the market value of any other employee.
Now, if you start to really get serious with this type of legislation and start to demand that corporations raise the salaries globally(and thereby lower profits), you have a problem. In this case, the board of directors and shareholders will likely just say, OK, forget it then, I will take my cash and my profits and take my ball and go home - let the government build their own software company.
Or, you can do what the Soviets tried - have the government build the factories and control production. Salary then becomes moot. Raid the corporate offices with plowshares and bash everyone over the head and hang the board of directors and executives. You can then set up a new system run by a governmental party that controls labor and production. Comrade Grizz, you WILL report to work tomorrow and make computers ! In exchange for your labor, you get to share a small apartment with five other people and will be supplied weekly rations of bread and borsch. For entertainment, each apartment is supplied with a black and white TV so the occupants can watch government-run TV stations showing commercial-free programming featuring reruns of the workers party parade.
People will always strive to make their lives better and more comfortable. In the developed world, we have the bare essentials we need to survive; however, we are not content with just survival--we will always want more than bare essentials. The corporations simply gives us what we crave. Regardless of who you are, where you are, or what your political and economic system is, you will always have the desire to live more comfortably and more efficiently. Fulfilling this desire requires the ability to purchase more refined goods and services. This in turn requires an economy where these increasingly sophisticated goods and services are available to the consumer that demands them. Such a market requires people who are motivated to maximize profit by investing in a corporation that will then have the capital to manufacture such sophisticated goods. At the fundamental level, this entire system is built upon a consumer base that is interested in more than just survival.Take away the profit potential and you take away the desire to spend the investments. Are we willing to give up our flat panel TV's and SUV's to 'make things right'?
We are well beyond the evolutionary hunter-gatherer stage of existence. Most of us do not work to survive, we work to maximize our comfort. We are not concerned where our next meal will come from, but how enjoyable it will be to the palate. We have a refrigerator full of food but get bored and head out to TGI Friday's to spend more of our wealth on something we do not need to purchase.
I ask anyone reading this thread to honestly and privately answer this question: Is our angst against the disparity in wealth primarily motivated by the unethical status of the disparity itself, or is it motivated to a greater extent by the observation that although we may work as hard as others, some can purchase a vastly greater supply of comfort and material pleasure in life than we are able ?
To someone in the third world who's main worry is bare survival, we are not poor, none of us. We are a society who has much more than we need to survive, but that simply is not good enough. There are many in this world who would give their fight arm(and leg) for a bare-bones shack with running water, 3 rudimentary meals a day from the fridge, sanitation, police protection, and a bus system to take them here and there. I suspect the real beef for many is that we have to settle for a mere 32 inch flat panel LCD instead of a Plasma and are forced to spend $4 a gallon for gas to make it to the ball game.
Legislation can be effective but instead of waiting for the bureaucrats to step in or expecting corporations to stop giving us what we are asking for without making large profits, we need to ask what we can do individually. It would be more prudent to rely on our own good nature and share some of our own personal wealth. Why haven't we done anything? We are just as responsible and guilty.We should feel blessed that by pure luck of the draw we have been afforded the opportunity to live in a society that has given us the opportunities and privileges that we now have.
If each of us took a bit of this privilege and donated a mere $20 of our wealth each year to a relief fund or legitimate global charity effort, we would make a serious difference in distributing goods and wealth. This would not give others the material benefits we have but would certainly go a long way in alleviating the poverty and suffering.
There are many legitimate agencies and social services out there, whether religious or secular. If you want to do something without waiting for others to act, find one of those and donate your time or money. These are things WE can do NOW to bring about change and make a difference. Not only does it make you feel good knowing you can help makes a difference, it is also more prudent than waiting for governments to cure all of the social ills.
There are no easy solutions to these problems. As I said in another thread, the consumer has more power to bring about change than the government ever will. This system is made for us and by us. We built it and we feed it by our consumption patterns. Corporations are simply giving us what we want. That's what they do. In exchange for providing the goods and services, they make a profit.

This message is a reply to:
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Replies to this message:
 Message 15 by Rahvin, posted 04-02-2008 8:56 PM Grizz has replied

  
teen4christ
Member (Idle past 5799 days)
Posts: 238
Joined: 01-15-2008


Message 14 of 19 (462386)
04-02-2008 7:37 PM
Reply to: Message 11 by Phat
04-02-2008 2:40 AM


Re: Rock and Roll
Phat writes
quote:
BTW what sort of salary cap would you suggest that the CEO's have?
I don't know the answer to this. For now, I'm just a poor college student. However, just because I don't know the answer to this doesn't mean I can't tell when a CEO is getting too much pay for his contribution to the company. It's sort of like one of those questions on the SAT where you know it's definitely not A and it's definitely not B but by golly you can't figure out if it's C, D, or E.

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Rahvin
Member
Posts: 4032
Joined: 07-01-2005
Member Rating: 9.2


Message 15 of 19 (462394)
04-02-2008 8:56 PM
Reply to: Message 13 by Grizz
04-02-2008 6:48 PM


Re: Cap'n Crunch
There are simple answers to the problem of economic disparity but no simple AND practical answers.
I'd agree with that. At least we agree that the massive disparity of wealth is a problem.
This suggestion would certainly seem like a simple and practical solution that addresses the gap in compensation but it simply would not work as a practical remedy, for a number of reasons. Let's start with what we all know - Corporations exist to make a profit. Let's then assume there was a regulation that declared that the individual salaries of the executive officers must not exceed a specified multiple of the average employee salary within the corporation. What would happen?
Would the board of directors convene to authorize raising the salary across the board in order to keep the CEO salary at it's current base prior to regulation, or would they simply lower the CEO salary? As stated, the goal of any Corporation is to maximize profits. With this goal in mind, consider a corporation with 20,000 employees, Would it be more profitable to simply lower the CEO salary from say $10M to $5M or increase the total payroll by $20M to meet the average requirement? No answer is needed here.
Incorrect. The free market itself will select for those companies that do provide higher wages across the board, thus allowing higher-paid executives. The entire point is to stop the insanity of 10M+ salaries, but those corporations that increase average wages in order to allow for higher-paid executives will be able to attract higher-quality CEOs (in theory - obviously throwing money at CEOs hasnt worked for keeping companies afloat).
When you say that the goal of corporations is to make money, you're correct. But then you say that across-the-board raises are impossible because it cuts into porfits...while compeltely ignoring the fact that a 10M+ salary also cuts into profits. Let's assume your 20,000 employee company, and let's assume they all make 35,000 on average, and teh CEO currently makes 10M. If you drop the CEOs salary to a reasonable amount, say, 600,000, that frees up 9.4 MILLION DOLLARS. Across 20,000 employees, that would be a $470 raise per year. Not a lot, certainly, but the company's profits are compeltely unaffected, and most importantly, the massive disparity of wealth is eliminated.
This isn't a feasible solution to the entire problem - CEOs have a great deal of money to throw around at lobbyists and carry a large amount of favor in Washington, so it's barely even possible to push through. But as a salary cap strategy, I think it's far more effective to establish limits based on a scalable number (ie, a percentage of average employee salaries) so that the disparity is unlikely to grow again in the future. Obviously setting a hard-cap like "10 million dollars" is nonsense since it compeltely stagnates the system. There's no encouragement for higher employee wages, no encouragement for CEOs to in crease profits for the company, and CEOs will actually "suffer" from inflation becasue they cannot receive raises past that point.
Again - this isn;t a solution to the problem. It's a proposed method of dealing with CEO salary caps alone, with the goal being incentives to increase average employee salaries, eliminate logic-defying CEO compensation, and closing the compensation gap. On those points, as a salary cap strategy only, it works. Obviously a real solution tot eh income gap problem is going to need to involve a lot more than simple salary caps - investors, bank interest, inherited wealth, stock options, "fringe benefits," and a plethora of other issues contribute and would all need to be accounted for lest another loophole be created and exploited.
Unless one were to introduce legislation that not only regulates the officer salary but also requires a boost in all employee salaries, the action does nothing practical but increase the corporate profit by $5M. With the goal of profit in mind, why would any corporation adjust the overall salary instead of just lowering the CEO wage? It's not like the CEO would refuse to work --they would have no choice, as all corporations would now have this requirement. You would have accomplished nothing in achieving the goal of adding income to the bottom tiers. What results is simply lowering the market value of the CEO while failing to increase the market value of any other employee.
You're assuming that all businesses would react identically. The free market system works via competition, and it works very well when properly regulated. In this case, regulating CEO salaries based on a percentage of average employee income will allow those corporations that do increase average wages to pay their CEOs more - providing the competition you think would be lacking. It's a direct incentive to increase employee wages while providing a reasonable cap to CEO salaries.
Now, if you start to really get serious with this type of legislation and start to demand that corporations raise the salaries globally(and thereby lower profits), you have a problem. In this case, the board of directors and shareholders will likely just say, OK, forget it then, I will take my cash and my profits and take my ball and go home - let the government build their own software company.
Bullshit. They might move their operations offshore, but companies don't close down due to salary restrictions. There is still plenty of profit to be made. See my example with your 20,000 employee company above - company profits would be compeltely unaffected by the changes, and the average employee would receive almost $500 more per year. It's compeltely feasible without affecting the bottom line at all, and it also has the added benefit of increasing employee morale and production. Don't let those idiotic HR drones fool you - the best way to make an emloyee happy is not to make them feel important, but rather to compensate him appropriately. When the employees are able to feel a real benefit from improving profits instead of all of that money being given to a single individual, they will be far happeier and better motivated.
Or, you can do what the Soviets tried - have the government build the factories and control production. Salary then becomes moot. Raid the corporate offices with plowshares and bash everyone over the head and hang the board of directors and executives. You can then set up a new system run by a governmental party that controls labor and production. Comrade Grizz, you WILL report to work tomorrow and make computers ! In exchange for your labor, you get to share a small apartment with five other people and will be supplied weekly rations of bread and borsch. For entertainment, each apartment is supplied with a black and white TV so the occupants can watch government-run TV stations showing commercial-free programming featuring reruns of the workers party parade.
Communism doesnt come into play here. This is not a situation of black/white, capitalist/communist. I am not advocating communism - I am advocating a regulated free market system, becasue unregulated systems lead to abuse and eventually topple nations.
There is nothing involved in capping CEO salaries that will result in communism. This entire paragraph is a massive red(-scare) herring.
People will always strive to make their lives better and more comfortable. In the developed world, we have the bare essentials we need to survive; however, we are not content with just survival--we will always want more than bare essentials. The corporations simply gives us what we crave. Regardless of who you are, where you are, or what your political and economic system is, you will always have the desire to live more comfortably and more efficiently. Fulfilling this desire requires the ability to purchase more refined goods and services. This in turn requires an economy where these increasingly sophisticated goods and services are available to the consumer that demands them. Such a market requires people who are motivated to maximize profit by investing in a corporation that will then have the capital to manufacture such sophisticated goods. At the fundamental level, this entire system is built upon a consumer base that is interested in more than just survival.Take away the profit potential and you take away the desire to spend the investments. Are we willing to give up our flat panel TV's and SUV's to 'make things right'?
We are well beyond the evolutionary hunter-gatherer stage of existence. Most of us do not work to survive, we work to maximize our comfort. We are not concerned where our next meal will come from, but how enjoyable it will be to the palate. We have a refrigerator full of food but get bored and head out to TGI Friday's to spend more of our wealth on something we do not need to purchase.
Again, you're insinuating that I am suggesting the dissolution of capitalism. I am not. I am proposing rational regulations be placed on the free market system to prevent the abuses that history has shown us will eventually cause the system to self-destruct if not kept in check. Massive income gaps are one of several ticking timebombs inherant in an unregulated capitalist economy, but liek the others, it is not beyond a measure of control.
I ask anyone reading this thread to honestly and privately answer this question: Is our angst against the disparity in wealth primarily motivated by the unethical status of the disparity itself, or is it motivated to a greater extent by the observation that although we may work as hard as others, some can purchase a vastly greater supply of comfort and material pleasure in life than we are able ?
And that doesn't change by placing rational caps on CEO salaries. If it was a hard cap with no possible adjustment, just a simple line that says "this is the maximum," then you might have a point - but that's not what I'm suggesting. I suggested a percentage based system, so that CEO salary caps can scale based on employee compensation. This prevents income gaps, allows for wage increases including to the CEO, and encourages wage increases for the average worker all at the same time, while being immune to such issues as inflation, and adaptable to provide a comptetive environment for employee and CEO salaries amongst corporations.
To someone in the third world who's main worry is bare survival, we are not poor, none of us. We are a society who has much more than we need to survive, but that simply is not good enough. There are many in this world who would give their fight arm(and leg) for a bare-bones shack with running water, 3 rudimentary meals a day from the fridge, sanitation, police protection, and a bus system to take them here and there. I suspect the real beef for many is that we have to settle for a mere 32 inch flat panel LCD instead of a Plasma and are forced to spend $4 a gallon for gas to make it to the ball game.
Irrelevant. History shows us that income gaps, regardless of the actual level of wealth of a society, will eventually casue problems. You can hardly decry human greed when human greed is the very basis of the capitalist system.
The key to regulating an economy is to work with the greed, not against it. Provide greed-based incentives for the desired action. If the desired result is decreased income gaps, increased worker salaries, and decreased CEO salaries overall, then a percentage-based CEO salary cap will accomplish all of these using greed as an incentive. If the CEO desires a raise, he needs to help the company make more profit, in turn allowing for all of the employees, including himself, to receive a raise. To attract higher-quality CEOs with more attractive salaries, corporations must compete to have the highest average employee salary. The incentives cause the intended result.
Legislation can be effective but instead of waiting for the bureaucrats to step in or expecting corporations to stop giving us what we are asking for without making large profits, we need to ask what we can do individually. It would be more prudent to rely on our own good nature and share some of our own personal wealth. Why haven't we done anything? We are just as responsible and guilty.We should feel blessed that by pure luck of the draw we have been afforded the opportunity to live in a society that has given us the opportunities and privileges that we now have.
If each of us took a bit of this privilege and donated a mere $20 of our wealth each year to a relief fund or legitimate global charity effort, we would make a serious difference in distributing goods and wealth. This would not give others the material benefits we have but would certainly go a long way in alleviating the poverty and suffering.
There are many legitimate agencies and social services out there, whether religious or secular. If you want to do something without waiting for others to act, find one of those and donate your time or money. These are things WE can do NOW to bring about change and make a difference. Not only does it make you feel good knowing you can help makes a difference, it is also more prudent than waiting for governments to cure all of the social ills.
There are no easy solutions to these problems. As I said in another thread, the consumer has more power to bring about change than the government ever will. This system is made for us and by us. We built it and we feed it by our consumption patterns. Corporations are simply giving us what we want. That's what they do. In exchange for providing the goods and services, they make a profit.
You arent making sense. This isnt about charity. This is about the insane gap in income between a CEO and the average worker. I'm not talking about anything other than CEO and employee salaries here, Grizz. I don't see how global poverty factors into that except at the barest fringe.
My sole point in this thread is that the gap in income between CEOs and employees is detrimental to the system in the long run. one solution to just that one facet of income gaps is a cap on CEO salaries, and the mors reasonable way to cap those salaries as I see it is to utilize a percentage of the average employee's salary to set the cap. This is not about communism, it's not about global poverty, it has nothing to do with how priveledged the first world is in comparison to the third world, it is solely about the difference in income between a CEO and the average employee.
Fully three quarters of your post didn't have anything to do with that.

This message is a reply to:
 Message 13 by Grizz, posted 04-02-2008 6:48 PM Grizz has replied

Replies to this message:
 Message 16 by Grizz, posted 04-02-2008 9:49 PM Rahvin has not replied
 Message 17 by Grizz, posted 04-02-2008 10:36 PM Rahvin has not replied

  
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