US CEOs enjoy 40% pay rise

[galdre]

That begins with the assumption, unproven, that there is any connection between greatest talent and CEO pay. Instead you have to consider the alternative scenario where CEOs and Board members have a cozy little clique going at the expense of the shareholders. And when you factor in how many of those top "talent" executives have been fired for incompetence or had their companies go bankrupt, the talent explanation looks thin at best.

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the fact is, if those at the top are still getting richer, then the current system is working for them and they will not want it to change

 

[JollyRoger]

You need the "top talent" in there at times of crisis because only they can understand the complexity of the mistakes they have made.

 

[MagisterCultuum]

If I recall correctly, the "top talent" that companies pay the buck bucks for statistically tend to underperform more mediocre choices. You get raises by earning the company more money. You earn the company the most money by taking big risks that happen to pay off. Such payoffs are based almost purely on luck, which tends to run out. Taking the same sort of risks in the future is more likely to lead to big losses. Those who are cautious enough to hedge their bets don't tend to rise as high or take as many other people down with them.

 

[Crezth]

If I recall correctly, the "top talent" that companies pay the buck bucks for statistically tend to underperform more mediocre choices. You get raises by earning the company more money. You earn the company the most money by taking big risks that happen to pay off. Such payoffs are based almost purely on luck, which tends to run out. Taking the same sort of risks in the future is more likely to lead to big losses. Those who are cautious enough to hedge their bets don't tend to rise as high or take as many other people down with them.

"Rise as high" being a relative term because the people who take risks and fail still get their golden parachute and pocket more than most Americans will make in their lifetimes.

 

[GenMarshall]

I'm not suppressed that the 1%ers are getting fat pay raises while pay cuts n lay offs are happening .

 

[Tani Coyote]

Sometimes you have to sell or be crushed.

In which case, the wealthy are reaping the costs of the system. When they started the business they ran the risk of being run out.

Which is how it should be, in my opinion. No bailouts, no golden parachutes, none of that. Mobility should be downward and upward.

 

[Traitorfish]

In which case, the wealthy are reaping the costs of the system.

Not entirely convinced that someone handing you a big wad of cash is a "cost", exactly.

 

[Ayatollah So]

This doesn't mean they gave themselves a pay raise.

No, that's what friends are for!

Chance that a member of a U.S. corporation’s compensation committee is someone the CEO considers a “friend” : 1 in 3

 

[BasketCase]

If these companies are profiting so hugely, then why are the rest of us facing wage-stagnation and even regression?

Depends why companies are making huge profits. Generally, they do that by avoiding bad investments. If "the rest of us" are a bad investment, then not hiring "the rest of us" is the reason why companies are doing well.

A company does one of two things. Either it makes a profit or it goes broke. And if the second one happens, everybody in the company is out of a job, which is not good for "the rest of us". Companies will only hire/raise wages if it's profitable to do so. And right now it's not.

 

[JollyRoger]

If they have profits, then they can still use half that profit to create jobs and still be profitable.

 

[Tani Coyote]

Not entirely convinced that someone handing you a big wad of cash is a "cost", exactly.

It's not the worst possible outcome, of course, but it's a cost of the system in that there's always the chance you'll be eliminated from the market.

Some are fortunate to get money in the process.

Some not so much.

Yay for social mobility!

 

[Tenochtitlan]

A wage of over 100 million dollars? I think 500k is already relatively absurd for a job wage, but over a hundred million? Dear god this economy needs fixing.

(look at me, I'm captain obvious)

What's wrong with someone getting paid 100 million for a job well done? He made services to his clients that his clients were more than happy to pay for, and made profits for his shareholders. He earned that money. It's not like he forced people to give him money.

Wealth is created, and there is no limit to it. If he invented a device that people wanted, and he made a profit, more power to him. He created a device for the people that wanted it. I don't get this hate for people who actually produce wealth.

If they have profits, then they can still use half that profit to create jobs and still be profitable.

Why do you want to create jobs for the sake of creating jobs?

The whole point of the economy is not to create work, but to eliminate work. Automatic dishwashers eliminate the need to wash dishes manually, spreadsheet programs eliminate the need for an army of accountants, so and so forth.

Work is a means, not an end in and of itself.

 

[Tenochtitlan]

edit: double post merged

 

[Traitorfish]

What's wrong with someone getting paid 100 million for a job well done? He made services to his clients that his clients were more than happy to pay for, and made profits for his shareholders. He earned that money. It's not like he forced people to give him money.

That's hardly self-evident. "Earning" is a claim of moral entitlement, when you get right down to it, it can't simply be inferred from the absence of coercion.

Wealth is created, and there is no limit to it. If he invented a device that people wanted, and he made a profit, more power to him. He created a device for the people that wanted it. I don't get this hate for people who actually produce wealth.

What definition of "wealth" are you actually using, here? I would not understand holding a patent to constitute the active creation of wealth, any more than I would understand renting out property to constitute "wealth-creation".

Why do you want to create jobs for the sake of creating jobs?

The whole point of the economy is not to create work, but to eliminate work. Automatic dishwashers eliminate the need to wash dishes manually, spreadsheet programs eliminate the need for an army of accountants, so and so forth.

Work is a means, not an end in and of itself.

Small comfort to the unemployed.

 

[Tenochtitlan]

If I recall correctly, the "top talent" that companies pay the buck bucks for statistically tend to underperform more mediocre choices. You get raises by earning the company more money. You earn the company the most money by taking big risks that happen to pay off. Such payoffs are based almost purely on luck, which tends to run out. Taking the same sort of risks in the future is more likely to lead to big losses. Those who are cautious enough to hedge their bets don't tend to rise as high or take as many other people down with them.

Those that take the biggest risks are rewarded the most. They are the ones who took the risk. If you don't take risks, don't expect any rewards. Taking risks involves a lot more than just luck.

 

[Tenochtitlan]

That's hardly self-evident. "Earning" is a claim of moral entitlement, when you get right down to it, it can't simply be inferred from the absence of coercion.

Absence fraud or coercion, if you provide a service to someone, and he pays you for that service, what's the problem?

What definition of "wealth" are you actually using, here? I would not understand holding a patent to constitute the active creation of wealth, any more than I would understand renting out property to constitute "wealth-creation".

When you rent out property, you make capital available to tenants who see utility in using your property.

 

[Traitorfish]

Absence fraud or coercion, if you provide a service to someone, and he pays you for that service, what's the problem?

I'm just asking where "earning" enters into this. That implies some notion of a just distribution of wealth, which, as I said, is a more specific claim than just noting that somebody came across a given measure of wealth by means that are generally percieved as being above board. Would you extend this recognition of having "earned" their income to feudal aristocrats, for example, given that they similarly came across their wealth in legal and, by the standards of their time, ethical ways?

When you rent out property, you make capital available to tenants who see utility in using your property.

What does that have to do with "wealth-creation"?

 

[Yeekim]

I always hear the "top talent" excuse. They were making that excuse before everything hit the fan a few years ago too. How did that "top talent" work out? Oh right.

If the market is making these compensation levels the market needs a correction. And,what Cutlass said.

I believe we agree that top talent is sorely needed in troubled times.

Now, attempting to procure top talent with big money may easily fail.
Still, attempting to procure top talent without big money is almost guaranteed to fail.

What does that have to do with "wealth-creation"?

Only God was supposedly able to create something without anything to begin with.

 

[Cheezy the Wiz]

Work is a means, not an end in and of itself.

Yeah, a means to get money to survive. How dare anyone deny that to people in the interests of making money for themselves.

 

[Tenochtitlan]

I'm just asking where "earning" enters into this. That implies some notion of a just distribution of wealth, which, as I said, is a more specific claim than just noting that somebody came across a given measure of wealth by means that are generally percieved as being above board. Would you extend this recognition of having "earned" their income to feudal aristocrats, for example, given that they similarly came across their wealth in legal and, by the standards of their time, ethical ways?

Feudal lords were a de facto government with their own army that coerced taxes out of their peasants. CEO's of corporations in free markets cannot make a profit without satisfying the needs and wants of people.

What does that have to do with "wealth-creation"?

There are many ways in which making a profit is legitimate. Producing goods and services is one way. Another way is to make capital that you own available for rent. Another way is investing it with the expectation of return on your investment. I was using the first way as an example of legitimate profits, to which you replied 'but what about renting out property! There is no product there!' to which I pointed out that it is a service by making capital available to other for use, which was not available to them.