CEO Pay

[ShakeZula06]

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First off, why do you care? It's not your money.


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It is if you work for one of these money crazed lunatics.

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No it's not.

[Al68]

CEO pay is a contract between the CEO and the company's stockholders. If I don't own any voting stock in the company, it is not my place to say.
Unless I think I have the right to judge a contract I'm not a party to.

I think it would be "exorbitant and unjustifiable" for someone to sell their belly button lint for $100,000. But if I'm not a party to the contract, I should have no say in the matter, unless fraud or coersion is involved.

[ShakeZula06]

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Because of a variety of factors, human flourishing/well-being would be increased if a larger % of that went to the workers as opposed to the CEO.


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Is that part of the decision process for the stock holders? I see it as either a pay raise for the CEOs or nothing, not a who should get more money the CEO or the workers decision. Isn't that what it is?

[Utah]

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CEO pay is a contract between the CEO and the company's stockholders. If I don't own any voting stock in the company, it is not my place to say.
Unless I think I have the right to judge a contract I'm not a party to.

I think it would be "exorbitant and unjustifiable" for someone to sell their belly button lint for $100,000. But if I'm not a party to the contract, I should have no say in the matter, unless fraud or coersion is involved.

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Not quite. You have a stake in the efficiency and productivity of the U.S. economy. For example, you may not own GM stock directly but you certainly wouldnt want it to be permissible for them to be able to fake their financial statements because it is detrimental to society as a whole.

[Al68]

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Because of a variety of factors, human flourishing/well-being would be increased if a larger % of that went to the workers as opposed to the CEO.

I care about human well-being, not about "whose money is whose".

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If all workers' wages went up by 10% (in dollars} at the expense of rich people, this would only reduce the value of each of those dollars. Because the prices of the goods and services workers buy are determined by the wages of workers.

Who really thinks we could get something for nothing. All else being equal, more dollars in circulation means higher prices. CEO salary does not significantly contribute to price inflation of the types of goods and services that most people buy.
The only way to have a higher standard of living as a whole is to increase productivity as a whole. We cannot have a higher standard of living without higher productivity simply by increasing the number of dollars in circulation.

CEO pay is mostly invested in the economy instead of contributing to the amount of dollars in circulation, so this pay is not at someone else'e expense for the most part. If the CEO increases productivity in the slightest, it to everyone's benefit. This is what is important. Infinitely more important to the standard of living of working people than the {relatively} insignificant amount of money spent on CEO pay.

If an extra $1 million in CEO pay can result in an extra $1 billion in productivity or efficiency, it is a bargain. If a company would be more productive with a different CEO, the company should get another CEO and not worry about something as (relatively) trivial as a few million bucks a year.

[Al68]

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CEO pay is a contract between the CEO and the company's stockholders. If I don't own any voting stock in the company, it is not my place to say.
Unless I think I have the right to judge a contract I'm not a party to.

I think it would be "exorbitant and unjustifiable" for someone to sell their belly button lint for $100,000. But if I'm not a party to the contract, I should have no say in the matter, unless fraud or coersion is involved.

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Not quite. You have a stake in the efficiency and productivity of the U.S. economy. For example, you may not own GM stock directly but you certainly wouldnt want it to be permissible for them to be able to fake their financial statements because it is detrimental to society as a whole.

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I think you missed the part of my post that said "unless fraud or coersion is involved".

Otherwise, the fact that I may be interested in another party's contract does not give me any legitimate authority to deprive someone of their right to contract.

I'm libertarian, not an anarchist, so I do believe a legitimate function of gov't is to prevent force and fraud.

[pvn]

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CEO pay is a contract between the CEO and the company's stockholders. If I don't own any voting stock in the company, it is not my place to say.
Unless I think I have the right to judge a contract I'm not a party to.

I think it would be "exorbitant and unjustifiable" for someone to sell their belly button lint for $100,000. But if I'm not a party to the contract, I should have no say in the matter, unless fraud or coersion is involved.

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Not quite. You have a stake in the efficiency and productivity of the U.S. economy. For example, you may not own GM stock directly but you certainly wouldnt want it to be permissible for them to be able to fake their financial statements because it is detrimental to society as a whole.

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It's detrimental to the investors. And they would have actionable damages.

The detriment to everyone else is not anything they are entitle to protection from. If GM decided to close up shop tomorrow it would be detrimental to me if I happen to want to buy a Corvette next week. Should GM be compelled to stay in business?

Should workers be prosecuted for striking? Calling in sick?

[Utah]

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On July 31, 2004, Jobs successfully underwent surgery to remove the tumor, which did not require chemotherapy or radiation therapy.[31] During his absence, Timothy D. Cook, head of worldwide sales and operations at Apple, ran the company.[31]

Apple Computer's chief executive, Steve Jobs, apologized yesterday for a stock options scandal that he said "happened on my watch," after a three-month internal investigation uncovered "serious concerns" with the actions of two former executives.

Jobs was aware "in a few instances" that unnamed company executives had gone back in time to cherry-pick dates when stock prices were low to increase the likelihood that employees would turn greater profits. But Jobs did not "receive or otherwise benefit from these grants," the Cupertino, Calif., company said in a statement after the markets closed

Nice research and objectivity. To my knowledge, there is no dispute that Jobs pulled Apple out of the toilet.

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Whoops. It looks like you may need another CEO "ethics and responsibility" hero [img]/images/graemlins/wink.gif[/img]

http://www.ft.com/cms/s/801e1b82-960...0779e2340.html

[natedogg]

I'm not even sure what point you are trying to make. If you pay people more they will tend to perform better "to a degree".

yes. Brilliant.

But if your bonuses don't result in more productivity you fire the guy and hire a different one. Or if you don't need much productivity you hire very low skilled workers and pay them little cause all you need them to do is, let's say, sweep the floor. If you have a crappy floor-sweeper as an employee, the solution isn't to give them a $100 bonus for sweeping the floor right, the solution is to fire them and get another floor sweeper who knows how to do this basic task (or buy a Roomba).

Of course, you are free to run your business any way you like but if you are giving away big bonuses to the floor sweeper in your shop you may have a hard time competing with the guy who just fires the underperforming floor sweeper and gets another one.

natedogg

[Howard Treesong]

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`I respond to three questions,' stated the augur. `For the twenty terces I phrase the answer in clear and actionable language; for ten I use the language of cant, which occasionally admits of ambiguity; for five, I speak a parable which you must interpret as you will; and for one terce, I babble in an unknown tongue.'

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Source? Sounds like something Jack Vance wrote.