Discussion in 'Off-Topic' started by civvver, Feb 5, 2014.
No point of taking the risk of starting a company then.
Do CEOs of large companies spend a significantly larger portion of their personal income on criminal defense proceedings, or spend more time in prison than CEOs of smaller companies?
Sure I would.
No, they pick a person, and then they pick a salary, even though plenty of other qualified candidates exist, there's really no attempt to limit CEO compensation.
It's a lot like public sector jobs with overpaid employees and a glut of qualified underemployed people.
Proportional in the English sense, not the mathematical sense.
Huh? I started my company with essentially no risk, pretty much just so I can write off stuff that I was paying for anyway. I do the minimum amount of work necessary (which is very little) in order to generate enough tax liability for that purpose.
Ok, and to be totally certain, because I'm going on your words here, you're saying that:
[the market] = [business owners] = [logical + non-arbitrary]
Is anybody really surprised that female executives make less than males? That is except for those who claim there is no more gender discrimination anymore who will try to rationalize it in other ways?
And here's the CEO of GM making even less than the average...
Its a somewhat effective micro* system. But when you look at the macro over time, without some "unnatural" forces [IE State forces] you let certain market forces erode the effectiveness and advantages the basic free market model creates.
Which is why yea, the penalty on their margins is good at incentivizing certain local outcomes but can create wider social feedback loops that effectively threaten that free market's very existence. The idea that intervention can solve this paradox is agreed on by nearly any economist - the issue of course is if we are smart enough to use enough government balancing forces [And thats where you get your monetarists like Friedman that some neo-classicists like to trot out, who many forget agreed that Government intervention would be preferable in nearly any situation with enough information and capability to act accordingly, something unfortunately Friedman believed could rarely truly exist unanimously]
The skewed average that's problematic for non-gendered reasons? That one?
We should all cry or be angry that this woman gets slightly more than 1 million dollars per year. How are those ceo's supposed to live? :/
She's not being paid absurdly enough! When will the soul-crushing yoke of sexism lift itself from the shoulders of neo-liberal CEOs!?
For every person getting paid absurd amounts, there is another person, who is even richer, paying them.
Or maybe not. I don't know.
Isn't CEO pay determined by a board of share-holders?
Precisely - the shareholders, plural, are getting more money than the CEO, but it is not necessarily the case that any one shareholder takes more out of the company than she does.
Interesting in this debate to see the usually correlating reactions against sexism and against excessively high executive pay clash... somewhat bizarrely, I may add.
Probably not, but they spend a far bigger portion of their time dealing with lawyers, which nobody likes.
No, you wouldn't. When a major corporation hire a CEO they expect, besides excellent qualifications, both academic and professional (which you don't have because you're too young), to hire a professional with very good working relations with top government officials and high level executives of other companies (suppliers and customers, or potential suppliers and customers, and potential JV partners, and financial institutions, and so on and so forth). You bring nothing of that to the table. That said, your inflated sense of self-importance is certainly a characteristic you share with a lot (of the worst) CEOs.
And of course this whole discussion is moot, because your suggestion that the CEO of the small consulting firm deserves more is untenable on the face of it - the small firm can't pay as much because it doesn't make as much.
So you think they pick a person randomly and then randomly assign a salary? I see a lack of corporate experience there.
Then yes, it is. And I can prove it. I have data from US public corporations on my laptop, and I can do a regression on EViews showing that CEO pay does increase with the size of the company, even controlling for sector and margin of profit, and that this result is statistically significant (and I'll make sure there is no heteroscedasticity and other common errors). BUT I won't do that for nothing. Let's bet a friendly sum of a 1,000 dollars (or 10,000 or 100,000, make your choice), and of course if you disagree with my analysis you're free to show it to any accredited econometrician of your choice.
No, that's not what I said. I said that business owners are free to set the salary they desire for their executives, and for that they analyze the rest of the market, and that's a logic and non-arbitrary process.
I'm not sure, seems like you'd just be having the same argument over smaller numbers. As long as everything still hangs on the wage, all you can really do is fiddle the variables, not alter any fundamental logics.
I wasn't aware that "dealing with lawyers" or "doing stuff nobody likes" were good reasons for higher salaries, given they have essentially no effect on the supply of CEO labour.
Yeah, I've got those things.
The various non-competes in my previous contracts are actually kind of funny, if you stack them all up I basically can't work with/for anyone.
Well sure, but "ability to pay" doesn't have much relation to what employees "deserve". My government essentially has the ability to pay whatever they want, so as a result large sections of the public sector are drastically overpaid compared to the private sector. I'd posit that CEO pay largely results from a similar market failure.
No, they pick a person based mostly on [some metrics not related to prediction of job performance] and pay a salary comparable to what other companies are paying - there's never any downward pressure on salaries due to quantity supplied of qualified (in terms of metrics related to future company performance) labour.
Thankfully for you, I'm qualified in econometrics.
Obviously CEO pay increases with company-size, but that's not what I was asking. I'm asking you to show company performance suffers when CEOs aren't paid in relation to the company size.
So divide companies into buckets based on CEO pay. Show that within each bucket, larger companies perform worse.
The formula Marx gives is flimsy enough for me to regard it as a philosophical point and not one to formulate a specific policy on. Suffice to say, a worker is not paid proportionally to his contribution toward wealth creation when his pay is set by his boss. The best situation, therefore, is for the creators of wealth to have control over the distribution themselves, to do with as they see fit, rather than trying to split hairs over who exactly created each iota of wealth. After all, value is reified by an object's utility, it's not an inherent quality. Something manufactured which has no use also has no value. The only value we can speak of its containing is that which might have been expended elsewhere making useful things.
Who cares what peoples' opinions are right now? I didn't ask what people want.
They are the only ones who are free. This is what you fail to understand.
I agree, the end goal is to do away with them entirely. But we must do something in the meantime. We can't just give up wages one day. "Who works, eats" can go a very long way toward de-bourgeoisifying society, and redistributing wealth in the long haul.
Wages can't be gotten rid of until they're rendered meaningless. Just like money. Just like the state.
I care what people's opinions are right now.
And it would seem a very strange kind of person who doesn't. Though maybe not an uncommon one.
Well we aren't talking about what peoples' opinions are right now, we're talking about whether something is right or wrong. Don't play these stupid games with me.
You don't know that they have no effect on the supply of CEO labor. I think they probably do. A CEO will demand more money to accept a particularly miserable job that involves spending most of his hours (including of course "personal" hours, which CEOs barely have) talking to lawyers. It certainly influences CEO pay.
Good for you I guess. But if you're already a CEO or have an equivalent position just saying you'd do better than most CEOs is not really a statement on CEO pay.
What employees deserve cannot be determined by some formula. As I always say in this discussions, the fact that the market is willing to pay more to you than to person X does not necessarily mean you're a better person or more of a hardworker; the opposite may be true. It only means that the your particular skillset is on higher demand (or rather, commands a higher price on the supply and demand equilibrium for that particular skillset).
So you can't just say I think employee X deserves more than Y even though the market is willing to pay Y more. Or rather of course you can, but that's just a meaningless individual opinion.
Of course they'll try to pick a metric based on job performance, but won't necessarily succeed. And then there are the other considerations I mentioned, which are often more important.
I don't know that they suffer (though it might - large companies underpaying their CEOs compared to the rest of the market are probably underperforming. Establishing the correct casual link here would be tricky). I do know that virtually all of the CEO pay increase since 1980 can be attributed to increase in corporation sizes. So the market does believe that increased size means increased responsibility which merits higher pay.
What about artists, or those in the service industry, or the makers of luxury goods? A Rolls-Royce is no more useful than a Fiat Punto, but it's unquestionably more valuable.
On wage setting they're the only ones who have full freedom, of course. But in reality they're constrained by lots of stuff - by the rest of us, really. So even though they could pay whatever they feel like, in reality they can't - not for the CEO and not for lowliest employee. It works great.
Separate names with a comma.