SirRoxalot said:
I think that most people are happy if they're fairly compensated for the work that they do. It's a little tough to swallow that a CEO is worth nearly 39 times what the average worker makes.
Yeah, and it's probably easy for you to rationalize that the guy at bat makes about a thousand times what the guy selling the Dodger Dogs makes. Great talent makes more than lesser talent and lesser talent makes more than the non-talented in any field.
Who actually produces the product, sells that product, and creates the profit that everyone in the company is supposed to benefit from? And that number doesn't include a lot of the perks like corporate jets, million-dollar bathrooms, and multi-million dollar office suites.
The management team determines what the product is, when it needs replacing or refreshing, how to maket it, how many to make so as to not flooded with inventory and how to price it against the competion. The skills in multiple areas are more than just knowing how things are done... they are about visualizing how a company can manage facilities, markets, competiton, staff, raw materials, purchasing, distribution and make a profit from the strategy. Very few do it well, which is why good management talent should make a lot of money just as a good athlete, singer or comedian should be rewarded for being exceptional in their field.
If I were to need surgery, I would want the guy cutting me to be well rewarded and well motivated. I would not want him worrying about his J.C. Penny bill while he is supposed to be making me better..
As taxpayes, we support those compensation rates. The companies can write off the entire cost of compensation, reducing their tax liability. The rest of the taxpayers have to make up the difference.
That's dumb. Compensation is taxed at personal income rates, which in the case of high pay scales in high tax states, amounts to over 50% of the pay. That is higher than the corporate rate, so the government makes out big time with high salaries.
All business expense is a "write off" since what is taxed is the profit, or what is left after expenses.
It's not even a matter of competing with other countries. Compensation rates in Europe, Asia, and Australia are considerably lower.
If you look at the compensation for executives of large corporations of the same revenue levels, you will find that the CEO of Nissan probably makes more than the CEO of GM did... and the CEO of Lever is paid similarly to the CEO of P&G or Colgate and the CEO of BP earns comparably to the CEO of Chevron... and so on.
Keep in mind that the best executives get plenty of offers... and to keep them, their employer may give more money. And to get them, anoter company may offer more money still.
Even stockholders have no say in executive pay,
Most never have had any say... but if you own enough shares, as an individual or as a pension fund, mutual fund or trust, you can even get on the board and influnece such things.
and the "old boys club" has gotten greedy. You don't even have to be GOOD at your job as a CEO to make millions. You can collect millions for bankrupting the company.
Many CEOs or COOs are hired to save declining businesses, and are paid well for getting the best out of a bad situation... such as the people who looked over the liquidation of many of the steel companies.
