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81

As a secondary issue CEOs (and other top-level execs) have apparently become about 1209% better than they were in 1978. That’s sort of odd, and a remarkable increase in how good CEOs are, and how they’re getting better at a faster-and-faster rate. While the rest of us are just getting slowly more efficient. Even so good that the “bad” ones are given amazing golden parachutes for just having blessed their companies with their presence for short periods.

I don’t think your assumptions around this data point are very clear headed. Funny yes, but useful, no. Another data point to look at is basketball players. The average basketball player is paid 1316% more today in real terms than they were in 1970-71. Even the “bad” ones – whose teams do worse than they did last year – are given guaranteed contracts. Does that mean that they are 1316% better than in 1970? Are basketball players really getting better that much faster than the rest of us? These are misleading questions.

Granted you didn’t get any further than the assumptions – I guess the reader is supposed to just move on to some conspiracy theory that explains CEO salaries since you seem to suggest that they can’t be explained? Anyway, not a great start to this kind of analysis IMHO.

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I don’t think your assumptions around this data point are very clear headed. Funny yes, but useful, no. Another data point to look at is basketball players. The average basketball player is paid 1316% more today in real terms than they were in 1970-71. Even the “bad” ones – whose teams do worse than they did last year – are given guaranteed contracts. Does that mean that they are 1316% better than in 1970? Are basketball players really getting better that much faster than the rest of us? These are misleading questions.
As I pointed out earlier, I don’t think the niche market of sports superstars makes a great analogy for broader economic conditions. For a long list of reasons. It’s fun to talk about. The Premier League market conditions alone could be a whole thread. But not with a lot to extrapolate to the general economy. It’s like an alternate universe.

Granted you didn’t get any further than the assumptions – I guess the reader is supposed to just move on to some conspiracy theory that explains CEO salaries since you seem to suggest that they can’t be explained?

I’ve yet to read any truly convincing explanation for the “compensation inflation” of CEO-type salary vs. all other salary segments. On paper - econ 101 - it’s because they’ve somehow gotten more efficient or more valuable in some way. I’m open to that kind of explanation. Certainly the jobs have maybe gotten more stressful - I wouldn’t take on a high profile CEO job myself for that reason regardless of salary. Maybe that’s it. But nothing that’s like “settled” the odd discrepancy over the past few decades for me. I’m also open to more conspiracy type stuff. Like one purely speculative pet theory of mine is that CEO compensation is often largely determined by corporate boards. And corporate boards are often heavily represented by C-class executives from other companies. So C-class executives deciding that C-class executives should get amazing compensation…well that’s not all that surprising. :slight_smile: Part of it also might be cult of personality. We’ve come to think of the successful CEO as a kind of Randian Superman. We like to put them on the covers of glossy magazines, gazing wisely out over the skyline from their corner office on the 60th floor.

But maybe they just are that much more economically valuable than in ~1970 pure econ 101 stuff.

Sorry if you felt my analysis wasn’t valuable. But I didn’t intend to be doing a lot of analysis I’m just asking questions.

83

The article you linked to compared CEO wage growth to that of the “typical worker”. Is there any comparison to CEO compensation compared to corporate revenue or market capitalization? That could potentially explain their increase in “worth”. As in if revenue has grown by 1000% then a given company would hire 10X staff and pay them the same where the impact of a CEO’s decisions would be 10X greater.

84

I’ve yet to read any truly convincing explanation for the “compensation inflation” of CEO-type salary vs. all other salary segments. On paper - econ 101 - it’s because they’ve somehow gotten more efficient or more valuable in some way. I’m open to that kind of explanation. Certainly the jobs have maybe gotten more stressful - I wouldn’t take on a high profile CEO job myself for that reason regardless of salary. Maybe that’s it. But nothing that’s like “settled” the odd discrepancy over the past few decades for me. I’m also open to more conspiracy type stuff. Like one purely speculative pet theory of mine is that CEO compensation is often largely determined by corporate boards. And corporate boards are often heavily represented by C-class executives from other companies. So C-class executives deciding that C-class executives should get amazing compensation…well that’s not all that surprising. :slight_smile: Part of it also might be cult of personality. We’ve come to think of the successful CEO as a kind of Randian Superman. We like to put them on the covers of glossy magazines, gazing wisely out over the skyline from their corner office on the 60th floor.

But maybe they just are that much more economically valuable than in ~1970 pure econ 101 stuff.

Sorry if you felt my analysis wasn’t valuable. But I didn’t intend to be doing a lot of analysis I’m just asking questions.

I don’t think I’m the group that you are talking about in general, but I am a general manager of a big manufacturing company. It took the board about 6 months to find me, and another 3 months to vet me before I signed the contract. There is only one of me at every company. People who are capable of doing that level of management, survive that stress, and make those decisions are not easy to find in today’s world. Everything is leaner, budgets and margins are tighter, supply chains are messed up, and employees demand more and more. I’m already thinking about who will take over for me.

A little back of the napkin math - I make about 3.5 x my lowest paid full time employee. On average I probably make about 2.5 times the average employee’s salary. That is simple supply and demand. If there was a market full of people with my skill set out there then I would be paid less. There isn’t, and probably never will be.

As we used to say in the Navy - Pick your rate, pick your fate. I made a decision a long time ago to make the sacrifices necessary to someday, maybe, sit in this office. No regrets and no shame.

85

As in if revenue has grown by 1000% then a given company would hire 10X staff and pay them the same where the impact of a CEO’s decisions would be 10X greater.

Interesting theory, and maybe possible. I could see the “visionary leader” aspect of a CEO having deep influence on all the lower tiers of employee, and thus a sort of “multiplying factor” on importance. But visionary CEOs in charge of very large companies also isn’t that new. Jack Welch, et al. He made ~$17M way back in 2001. Now CEO salaries for guys in his elite cohort are $100M and up. $253M for the CEO of Alphabet.

But maybe the CEO market is a niche market to not worry that much about in the same way I’ve claimed that sports superstars also are not in an econ 101 labor market.

86

I make about 3.5 x my lowest paid full time employee. On average I probably make about 2.5 times the average employee’s salary. That is simple supply and demand.

That seems utterly reasonable, if not underpaid for all the skills and stresses. Like your recent stress with the problematic employee.

I’m thinking more of $200M CEOs. For example a journeyman computer programmer - someone pretty good, but not a superstar - at Alphabet might make $300K/year. Living wage. His CEO would be making about 750x that at ~$226M. And that’s not even factoring in total compensation with lots of Alphabet stock which could add up to billions in retirement.

87

I make about 3.5 x my lowest paid full time employee. On average I probably make about 2.5 times the average employee’s salary. That is simple supply and demand.

That seems utterly reasonable, if not underpaid for all the skills and stresses. Like your recent stress with the problematic employee.

I’m thinking more of $200M CEOs. For example a journeyman computer programmer - someone pretty good, but not a superstar - at Alphabet might make $300K/year. Living wage. His CEO would be making about 750x that at ~$226M. And that’s not even factoring in total compensation with lots of Alphabet stock which could add up to billions in retirement.

Except that is apples and oranges - I’m nowhere near what it takes to be the CEO of Alphabet. That is in a different realm. If I had the product background I would be at best a low level director. I would probably never get to go in the corner office. An MBA from Hofstra just doesn’t get you in that door.

It still comes down to what I said about supply and demand. There just aren’t that many people out there that can do what I do. There are far less that can do what the CEO of GM does.

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There are far less that can do what the CEO of GM does.

Sure. But Mary Barra “only” makes ~$29M. That’s like 2000-era Jack Welch salary. I get that. I understand making ~100x more than other highly skilled employees. It’s 1000x+ where I start to put on my Tucker Carlson face. I’ve been around really smart people. Billionaires. Mind-bogglingly smart, some of them. Are they worth more than 100 super skilled people? Hard for me to grasp, particularly when we often see those very same CEOs sometimes utterly faceplant and get things totally wrong.

It still comes down to what I said about supply and demand.

Maybe it does. Maybe it doesn’t. Market distortions are possible. Not like we have a shortage of examples of market distortions over the past few decades. Enough distortions that “It’s a market therefore it’s supply and demand end of story” satisfies me.

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There are far less that can do what the CEO of GM does.

Sure. But Mary Barra “only” makes ~$29M. That’s like 2000-era Jack Welch salary. I get that. I understand making ~100x more than other highly skilled employees. It’s 1000x+ where I start to put on my Tucker Carlson face. I’ve been around really smart people. Billionaires. Mind-bogglingly smart, some of them. Are they worth more than 100 super skilled people? Hard for me to grasp, particularly when we often see those very same CEOs sometimes utterly faceplant and get things totally wrong.

It still comes down to what I said about supply and demand.

Maybe it does. Maybe it doesn’t. Market distortions are possible. Not like we have a shortage of examples of market distortions over the past few decades. Enough distortions that “It’s a market therefore it’s supply and demand end of story” satisfies me.

I think it is obvious the vast majority of CEOs are overpaid.

It is easy to make a reasonable approximation for how much Lebron James is worth to the lakers over an average NBA player. And those estimates show Lebron brings in way more money than he costs the lakers.

I doubt the same applies for the vast majority of CEOS making over 10 million a year. Most are not really generating their worth?

There are obvious exceptions, like Steve Jobs was absolutely worth every penny Apple paid him. Imagine Apple having any other CEO from when Jobs returned to when he left. The difference between Jobs and basically any one else is hundreds of billions of dollars. I think those sorts of situations are rare. I think most CEOs are really interchangeable or at least not having a huge effect that demands the sort of compensation.

Like Mary Barra is doing a fine job, but I bet there are lots of people that would do near enough of a job. And I think generally most CEOs are in that bucket, just like most other employees at a company.

90

Most professional sports teams are a tremendous waste of money -every way you look at it.

The way I look at it is I want to be entertained and watching the best in the world is the best entertainment.

Yes but if there was a cap on payments, then they all get paid less. You still get to watch the best in the world. They aren’t going to magically disappear because they decide they aren’t rocking up to sweat it out for a measly $5M per year (figure made up for point of discussion). In case you missed it, these folk don’t tend to have very diverse talents that allow them to go elsewhere to make $100M. Perhaps they try it a different way, they player can only get x but y is limitless and goes to the charity of the player’s choice. Player gets the good press about how much they’ve been able to secure for a good cause.

One of the early posters nailed it. The extreme rich are just pricing everyone else out of the market. Residential property should be off limits to investment bodies or hell, even those who own more than say two homes. Do people really need to have 7 homes scattered about the world for when they decide to travel?

I think the ultra rich should be able to pass some wealth off to their kids. If you work really hard then you should be able to feel content in thinking your kids won’t be on the streets if something goes wrong and you’re not around to save them. They’ve earned that right at least.

91

There are far less that can do what the CEO of GM does.

Sure. But Mary Barra “only” makes ~$29M. That’s like 2000-era Jack Welch salary. I get that. I understand making ~100x more than other highly skilled employees. It’s 1000x+ where I start to put on my Tucker Carlson face. I’ve been around really smart people. Billionaires. Mind-bogglingly smart, some of them. Are they worth more than 100 super skilled people? Hard for me to grasp, particularly when we often see those very same CEOs sometimes utterly faceplant and get things totally wrong.

It still comes down to what I said about supply and demand.

Maybe it does. Maybe it doesn’t. Market distortions are possible. Not like we have a shortage of examples of market distortions over the past few decades. Enough distortions that “It’s a market therefore it’s supply and demand end of story” satisfies me.

I think it is obvious the vast majority of CEOs are overpaid.

It is easy to make a reasonable approximation for how much Lebron James is worth to the lakers over an average NBA player. And those estimates show Lebron brings in way more money than he costs the lakers.

I doubt the same applies for the vast majority of CEOS making over 10 million a year. Most are not really generating their worth?

There are obvious exceptions, like Steve Jobs was absolutely worth every penny Apple paid him. Imagine Apple having any other CEO from when Jobs returned to when he left. The difference between Jobs and basically any one else is hundreds of billions of dollars. I think those sorts of situations are rare. I think most CEOs are really interchangeable or at least not having a huge effect that demands the sort of compensation.

Like Mary Barra is doing a fine job, but I bet there are lots of people that would do near enough of a job. And I think generally most CEOs are in that bucket, just like most other employees at a company.

Also, there is a fairly competitive market for professional athletes. They can, and do, change teams. There is active bidding for certain players, whose skills are largely transferable from team to team.

I am not sure that is true for CEOs. How many other companies would bid $25mm+ for Mary Barra? Did GM need to pay her that much, or else she’d go elsewhere? (I really don’t know)

92

As a secondary issue CEOs (and other top-level execs) have apparently become about 1209% better than they were in 1978. That’s sort of odd, and a remarkable increase in how good CEOs are, and how they’re getting better at a faster-and-faster rate. While the rest of us are just getting slowly more efficient. Even so good that the “bad” ones are given amazing golden parachutes for just having blessed their companies with their presence for short periods.

I don’t think your assumptions around this data point are very clear headed. Funny yes, but useful, no. Another data point to look at is basketball players. The average basketball player is paid 1316% more today in real terms than they were in 1970-71. Even the “bad” ones – whose teams do worse than they did last year – are given guaranteed contracts. **Does that mean that they are 1316% better than in 1970? **Are basketball players really getting better that much faster than the rest of us? These are misleading questions.

Granted you didn’t get any further than the assumptions – I guess the reader is supposed to just move on to some conspiracy theory that explains CEO salaries since you seem to suggest that they can’t be explained? Anyway, not a great start to this kind of analysis IMHO.

No, it means that the sport of basketball is more popular that it was in 1970. The NBA had been around for less than 25 years in 1970.

Take any mature industry sector. Cars, Energy, travel, banking, etc. and you will find that today’s CEOs are paid many multiples more than they were in 1970.

93

Yes. Start with the taxation system. It needs massive simplification. Rates don’t need to increase one just needs to collect from those who are doing very well. You could take more than 50 percent from earners over 500K on income but you mainly would be taking from high earning professionals and the entrepreneurial class.

A doctor friend of mine figured out how much the government was taking. This was 25 years ago in Canada. After he made 150 K the government took 52 percent of income. When he turned around to spend the remaining 48 percent he was charged 15 percent sales tax. He worked in emerg and made about 120 an hour. So he cut back to three 8-10 hours shifts a week. It just contributed to wait times in the local emergency room getting longer.

Or maybe it opened up a job for someone else to also make decent money?

Why is the answer to what happens when the rich just stop working so much, always answered as if no one else would step in and fill the work load.

I hear it about businesses also, well if you cap this then emilo wont grow desoto… well if there is demand for his clothes, another shop will pick up that until they are making enough and decide to not expand and then another business will grow also. Is one company doing $1billion in sales better or 10 companies doing $100 million?

Not in this case. Severe doctor shortage and he also was one the most productive ER docs.

94

Was this Dec 2023 thread reappearance on my screen a random pop up ? To answer the chatbot ask “Revive this topic?” that I see to my right side screen I answer, No! I just want to know how it got revived rto my screen and put on the current list.

95

Stop buying shit from Amazon?

96

My problem with estate taxes, is not that I have a problem with the heirs only receiving a reasonable amount. It’s that I don’t trust the government to receive the money and use it wisely. The last thing we need is Government getting billions because someone dies. They will just spend it and then complain when the source of revenue runs out and is not sustainable. And most the spend will be on worthless items. Now if we could dedicate that estate taxes would only be used for say education, I could probably get behind it, assuming that existing funding wasn’t cut because of the new revenue (which is what usually happens).

97

Not sure I understand your argument about the money “running out”, people aren’t going to stop getting rich because of an estate tax. To your other point, I trust the Govt to spend the 40% of the money over 13 MILLION better than the decedents of some rich person, mostly being spend on useless items like a $20k tri bike at a 100W FTP (sorry wrong forum)

98

The issue of whether or not to have estate taxes is seperate from the issue of does the government spend money wisely. The government will acquire a certain amount of revenue and the estate tax is one method. A better discussion is to argue if the estate tax is a prefer source of government revenue over something else, like corporate taxes, tariffs or capital gains.

Then you can have a discussion on how the government spends the money if if more should be used for education. In that argument I would say that at the moment the federal government doesn’t collect enough revenue to cover their planned spending and if an estate tax does bring in any additional revenue it should not be used to support additional spending leading to a reduction in the budget deficit.

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Holy shit this is difficult to read without proper quotes. Not your fault and ties to the knew forum software but I can’t tell who is saying what and am giving up.

1 Like
100

The comment about the revenue running out is the fact that the revenue source is not consistent. So while 1 year 10 billionaires die and the next 10 millionaires die. But because of the first year, you create programs that are based around this new 10 b. in revenue. The next year, you can’t meet those commitments. So you either cut the program or more likely, take from another program or continue with debt.