Why CEOs are paid too damn much

[dismal]

I work making investments in private companies. We manage this issue of knowing what executives make in the companies in which we invest just fine without the government's help.

You, being a much larger investor, have much more clout in getting that kind of information out of a private company. And if public companies were able not to disclose executive you would still have much more power than a small investor to find out that information if you want it.

I have no problem with all investors or potential investors in publically traded having access to that information.

I have no problem with investors insisting on access to this information either.

However, I as a private citizen have all the means I need of insisting on it and/or avoiding investing in companies that refuse to disclose executive salaries without the government's help.

 

[Alcoholic Actuary]

A letter written to Charles Murray from a CEO explains the theory of why CEOs are paid too much. It is the first good explanation I have seen for why executives are paid so much, even the bad ones.

"No board that isn't about to fire its CEO really wants to admit that their CEO is a less-than-average performer by paying him or her less than average. But if the lowest-paid CEO’s are always being brought up to the average, then the average increases every year. Then for the high performers to be paid well, their compensation needs to be increased, but that raises the average… and so on every year."
​

Murray closes on this thought:

"And yet there’s not the slightest chance that CEO compensation can be made a private matter."​

Though, presumably, that would be the perfect solution. If it is kept a secret how much executives are paid, then there is no runaway pay competition. So why not? Nobody except my boss gets to know how much money I make unless I brag about it, so why must the pay of executives be public information?

Of Course!! It's the government's fault. I almost forgot to blame the government for something today.

I guess if you're as dumb as a hammer, every solution looks like a nail.

aa

 

[Axulus]

Coming from someone who complains about a business owner raising the minimum salaries

Link? I think you have ideological blinders on because no where did dismal complain about any of it. In fact, he explicitly stated multiple times he has no problem with it.

 

[laughing dog]

Coming from someone who complains about a business owner raising the minimum salaries

Link? I think you have ideological blinders on because no where did dismal complain about any of it. In fact, he explicitly stated multiple times he has no problem with it.

Right which is why he persistently misrepresents and ridicules what Price claims to be doing.

 

[Axulus]

Link? I think you have ideological blinders on because no where did dismal complain about any of it. In fact, he explicitly stated multiple times he has no problem with it.

Right which is why he persistently misrepresents and ridicules what Price claims to be doing.

Which is something different than a "complaint" - he discussed his perception of the wisdom and the motivations behind the raise, not complained about it. What actually happened in that thread was a bunch of whining and complaining about dismal because they disliked his characterization of Price's wisdom and motivations.

 

[laughing dog]

Right which is why he persistently misrepresents and ridicules what Price claims to be doing.

Which is something different than a "complaint" - he discussed his perception of the wisdom and the motivations behind the raise, not complained about it.

Right, because persistent misrepresentation and ridicule are the usual way to present one's perceptions. You should take your ideological blinders off.

What actually happened in that thread was a bunch of whining and complaining about dismal because they disliked his characterization of Price's wisdom and motivations.

It was apparent dismal had not read the OP nor had a clue what Price was actually doing. Your misread of the entire thread indicates reinforces my observation that you should take your ideological blinders off.

 

[Axulus]

Right, because persistent misrepresentation and ridicule are the usual way to present one's perceptions. You should take your ideological blinders off.

His opinion was that it was a charitable act that will harm business profit and may have been done in part for the publicity. Which part of that was misrepresentation or ridicule? Where is the complaint?

 

[laughing dog]

Right, because persistent misrepresentation and ridicule are the usual way to present one's perceptions. You should take your ideological blinders off.

His opinion was that it was a charitable act that will harm business profit and may have been done in part for the publicity. Which part of that was misrepresentation or ridicule? Where is the complaint?

You can spin this all you want. Without your ideological blinders, your argument is appears either counter-factual or disingenuous - neither of which is sufficient to find this line of "discussion" remotely interesting or informative, let alone useful.

 

[prideandfall]

Right, because persistent misrepresentation and ridicule are the usual way to present one's perceptions. You should take your ideological blinders off.

His opinion was that it was a charitable act that will harm business profit and may have been done in part for the publicity. Which part of that was misrepresentation or ridicule? Where is the complaint?

i have absolutely no idea how one could "present that opinion", or defend someone who presented that opinion, with regards to lower wage earners (specially the idea of traditionally lower wage earners being paid a bit more, and suggesting that it's a business-ruining charity case) but then not even bat an eyelash at CEO pay scales being astronomical for substantially less justification (relative to what a CEO does for the company vs. a lower income worker), and not have that be anything other than astonishing levels of ideologically based hypocrisy.

with a few exceptions (that tend to prove the rule more than anything else) individual company CEOs are pretty much as disposable as they are irrelevant, and provide no real value or substance to a company.
the entire concept of a "CEO", especially as one deserving a ludicrous amount of money for the substantial lack of value they bring, is an utterly fabricated delusion pretty much only reinforced by right-wing ideologues who are the ones who propagate the notion of "the most money should go the person with the fanciest title who does the least", which seems to be their economic mantra.

 

[Canard DuJour]

A letter written to Charles Murray from a CEO explains the theory of why CEOs are paid too much. It is the first good explanation I have seen for why executives are paid so much, even the bad ones.

"No board that isn't about to fire its CEO really wants to admit that their CEO is a less-than-average performer by paying him or her less than average. But if the lowest-paid CEO’s are always being brought up to the average, then the average increases every year. Then for the high performers to be paid well, their compensation needs to be increased, but that raises the average… and so on every year."
​

Murray closes on this thought:

"And yet there’s not the slightest chance that CEO compensation can be made a private matter."​

Though, presumably, that would be the perfect solution. If it is kept a secret how much executives are paid, then there is no runaway pay competition. So why not? Nobody except my boss gets to know how much money I make unless I brag about it, so why must the pay of executives be public information?

The quote doesn't describe a problem of "runaway competition" but of incompetent boards concealing bad calls.

It takes a Charles Murray to think the solution is to make the whole thing secret.

 

[bleubird]

His opinion was that it was a charitable act that will harm business profit and may have been done in part for the publicity. Which part of that was misrepresentation or ridicule? Where is the complaint?

i have absolutely no idea how one could "present that opinion", or defend someone who presented that opinion, with regards to lower wage earners (specially the idea of traditionally lower wage earners being paid a bit more, and suggesting that it's a business-ruining charity case) but then not even bat an eyelash at CEO pay scales being astronomical for substantially less justification (relative to what a CEO does for the company vs. a lower income worker), and not have that be anything other than astonishing levels of ideologically based hypocrisy.

with a few exceptions (that tend to prove the rule more than anything else) individual company CEOs are pretty much as disposable as they are irrelevant, and provide no real value or substance to a company.
the entire concept of a "CEO", especially as one deserving a ludicrous amount of money for the substantial lack of value they bring, is an utterly fabricated delusion pretty much only reinforced by right-wing ideologues who are the ones who propagate the notion of "the most money should go the person with the fanciest title who does the least", which seems to be their economic mantra.

And,there seems to be a lack of understanding of the reality of symbiosis by the corporate dick suckers.Nothing gets done without the worker.And,nothing gets done without capital.
http://reclaimdemocracy.org/corporate-accountability-history-corporations-us/

 

[prideandfall]

It takes a Charles Murray to think the solution is to make the whole thing secret.

well, not really, if you break down the argument simply:

CEO A: for whatever reason, gets paid a crapton of money, and the amount they are paid is public record.
CEO B: hey... CEO A is getting a crapton of money, that means the position of CEO is worth a crapton of money. pay me a crapton or i won't be CEO.
CEO C, D, E, F, G: yeah, me too!

the theory here seems to be that if CEO pay wasn't public, all the other potential CEO applicants couldn't go "well so-and-so makes 7 figures so clearly that's the industry standard for CEOs, so give me more money or else i won't be CEO here".
now, since the right-wing mantra dictates that the most useless person with the fanciest title in a company deserves the most money, the situation we're stuck with is that CEOs are seen as people who should be getting tons of cash, and if they use other CEO's pay as leverage for their own, it's a self-perpetuating payscale inflation.

make it so that no CEO knows what any other CEO is making and the theory goes you could reduce what each one makes since they can't leverage an 'industry average' pay scale against employers.

 

[prideandfall]

And,there seems to be a lack of understanding of the reality of symbiosis by the corporate dick suckers.Nothing gets done without the worker.And,nothing gets done without capital.

right, like... this is what i don't understand:
say i go to mcdonald's - the interaction i have with the cashier there will be infinitely more impactful to my perception of the company and the brand than any CEO they have ever had.
when it comes down simply to the company's continued ability to secure my consumer dollars, the bottom level workers always have VASTLY more influence than anything the top tier ever has done or ever possibly could do.

do you think anyone ever calls up Comcast customer support and then shrugs off whatever the nature of their experience was with the phone agent because they think that Brian L. Roberts has done an effective job at leveraging the company's market value?
nobody knows or gives a shit about the CEO of a company (again barring some very few exceptions that just prove the rule), and yet for some inexplicable reason they're given ridiculous fuckwads of money.

 

[Canard DuJour]

The quote doesn't describe a problem of "runaway competition" but of incompetent boards concealing bad calls.

It takes a Charles Murray to think the solution is to make the whole thing secret.

well, not really, if you break down the argument simply:

CEO A: for whatever reason, gets paid a crapton of money, and the amount they are paid is public record.
CEO B: hey... CEO A is getting a crapton of money, that means the position of CEO is worth a crapton of money. pay me a crapton or i won't be CEO.
CEO C, D, E, F, G: yeah, me too!

the theory here seems to be that if CEO pay wasn't public, all the other potential CEO applicants couldn't go "well so-and-so makes 7 figures so clearly that's the industry standard for CEOs, so give me more money or else i won't be CEO here".
now, since the right-wing mantra dictates that the most useless person with the fanciest title in a company deserves the most money, the situation we're stuck with is that CEOs are seen as people who should be getting tons of cash, and if they use other CEO's pay as leverage for their own, it's a self-perpetuating payscale inflation.

make it so that no CEO knows what any other CEO is making and the theory goes you could reduce what each one makes since they can't leverage an 'industry average' pay scale against employers.

Yes that's certainly one theory but not what the quote from the letter is saying. More like that poor performance doesn't exert a countervailing downward pressure because boards don't want to admit their expensive bad calls.

 

[bilby]

Marriage licenses are a creation of the government therefore it is within their rights to put restrictions and requirements upon those wanting a marriage license. They do that right now by telling you that you can only marry someone of the opposite gender. That's telling you who you should marry.

I'm not sure what you're finding so hard to understand about this.

But I am aware of why you'd want to ignore the part about being publically traded and FASB requirements.

The government has guns, so it can do things it should not do.

See all your threads about police abuse.

It can tell people who they can legally marry, it should not.

You are absolutely right.

If you want to marry an eight year old, that should be a private matter between you and her father.

The bloody government has no business interfering.

 

[RavenSky]

Right which is why he persistently misrepresents and ridicules what Price claims to be doing.

Which is something different than a "complaint" - he discussed his perception of the wisdom and the motivations behind the raise, not complained about it. What actually happened in that thread was a bunch of whining and complaining about dismal because they disliked his characterization of Price's wisdom and motivations.

How much is he paying you to be his lackey defender all the time?

 

[RavenSky]

It takes a Charles Murray to think the solution is to make the whole thing secret.

well, not really, if you break down the argument simply:

CEO A: for whatever reason, gets paid a crapton of money, and the amount they are paid is public record.
CEO B: hey... CEO A is getting a crapton of money, that means the position of CEO is worth a crapton of money. pay me a crapton or i won't be CEO.
CEO C, D, E, F, G: yeah, me too!

the theory here seems to be that if CEO pay wasn't public, all the other potential CEO applicants couldn't go "well so-and-so makes 7 figures so clearly that's the industry standard for CEOs, so give me more money or else i won't be CEO here".
now, since the right-wing mantra dictates that the most useless person with the fanciest title in a company deserves the most money, the situation we're stuck with is that CEOs are seen as people who should be getting tons of cash, and if they use other CEO's pay as leverage for their own, it's a self-perpetuating payscale inflation.

make it so that no CEO knows what any other CEO is making and the theory goes you could reduce what each one makes since they can't leverage an 'industry average' pay scale against employers.

I think you have described Charles Murray's position very well.

Of course, in reality, evidence has already shown that the top CEO's club is a very exclusive one wherein they all know each other and serve on each other's boards and hire each other. This means they will all know exactly what the other is earning. All Charles Murray's idea would accomplish is that the rest of us wouldn't.

Which is exactly the real point, I think.

 

[dismal]

The government has guns, so it can do things it should not do.

See all your threads about police abuse.

It can tell people who they can legally marry, it should not.

You are absolutely right.

If you want to marry an eight year old, that should be a private matter between you and her father.

The bloody government has no business interfering.

Are you now going to make an argument of the form "because the government should prevent 8 year olds from marrying it should also do [fill in the blank with unrelated related thing ]" or was this just pointless pedantry?

Hey, since the government should prevent 8 year olds from marrying it should also nuke China?

 

[Malintent]

A letter written to Charles Murray from a CEO explains the theory of why CEOs are paid too much. It is the first good explanation I have seen for why executives are paid so much, even the bad ones.

"No board that isn't about to fire its CEO really wants to admit that their CEO is a less-than-average performer by paying him or her less than average. But if the lowest-paid CEO’s are always being brought up to the average, then the average increases every year. Then for the high performers to be paid well, their compensation needs to be increased, but that raises the average… and so on every year."
​

Murray closes on this thought:

"And yet there’s not the slightest chance that CEO compensation can be made a private matter."​

Though, presumably, that would be the perfect solution. If it is kept a secret how much executives are paid, then there is no runaway pay competition. So why not? Nobody except my boss gets to know how much money I make unless I brag about it, so why must the pay of executives be public information?

all board members of a publically traded company must disclose their salary as per SEC regulations.
CEOs generally have a seat on the board.

 

[bilby]

You are absolutely right.

If you want to marry an eight year old, that should be a private matter between you and her father.

The bloody government has no business interfering.

Are you now going to make an argument of the form "because the government should prevent 8 year olds from marrying it should also do [fill in the blank with unrelated related thing ]" or was this just pointless pedantry?

Hey, since the government should prevent 8 year olds from marrying it should also nuke China?

I am making an argument of the form 'because the government should prevent 8 year olds from marrying it is wrong to argue that "it can tell people who they can marry, it should not"'.

Pointing out that your entire statement is completely wrong is not pedantry.

If you want to withdraw your incorrect and rather foolish claim in the light of an example showing it to be deeply flawed, then just do so. Don't double down on your error by claiming that pointing it out as erroneous is 'pedantry'.