Would a maximum wage ratio work?

[Testy Calibrate]

My guess is it could have far reaching unintended consequences. Stock markets, profit motivated innovation. It would probably require a general restructuring of the sysm. ]

Getting a business off the ground requires a lot more than most realize. It is based on risk reward. Sart limiting the reward for risk and investment and personal initiative goes down.

The worse case scenario was the failure of Soviet economics.

China changed to allow for personal initiative and reward.We could easily end up with far more problems than we have today.

armchair economics regurgitated from a management class at a university. Initiative is important. Ridiculous wealth is always, always, always, detrimental to a society. There's incentive and then there's a rigged system.

- - - Updated - - -

when r>g, society is paying rents for the privilege of being allowed to live amongst the aristocracy.

 

[steve_bank]

My guess is it could have far reaching unintended consequences. Stock markets, profit motivated innovation. It would probably require a general restructuring of the sysm. ]

Getting a business off the ground requires a lot more than most realize. It is based on risk reward. Sart limiting the reward for risk and investment and personal initiative goes down.

The worse case scenario was the failure of Soviet economics.

China changed to allow for personal initiative and reward.We could easily end up with far more problems than we have today.

armchair economics regurgitated from a management class at a university. Initiative is important. Ridiculous wealth is always, always, always, detrimental to a society. There's incentive and then there's a rigged system.

30 years engineering experience from Intel and Lockheed to small family tech start ups you never heard of.
Far from armchair.

If you are arguing risk reward has not fueled computers and the rest then you are just ignorant or one of those communist hangers on. Look at the early competi0n in the auto industry. The competition between Boeing and Mcdonnell-Douglas is legendary.

What spurred IBM to create its PC was the Apple II gaming business applications. Competition which the Soviet system lacked. Competition which to a degree China has enabled with success.

Placing top level wage limits is tinkering with a complex system that evolved over 200 years.

The Soviet system stigled initiative and competition. Argue otherwise? Go ahead, make my day...

 

[Testy Calibrate]

My guess is it could have far reaching unintended consequences. Stock markets, profit motivated innovation. It would probably require a general restructuring of the sysm. ]

Getting a business off the ground requires a lot more than most realize. It is based on risk reward. Sart limiting the reward for risk and investment and personal initiative goes down.

The worse case scenario was the failure of Soviet economics.

China changed to allow for personal initiative and reward.We could easily end up with far more problems than we have today.

armchair economics regurgitated from a management class at a university. Initiative is important. Ridiculous wealth is always, always, always, detrimental to a society. There's incentive and then there's a rigged system.

30 years engineering experience from Intel and Lockheed to small family tech start ups you never heard of.
Far from armchair.

If you are arguing risk reward has not fueled computers and the rest then you are just ignorant or one of those communist hangers on. Look at the early competi0n in the auto industry. The competition between Boeing and Mcdonnell-Douglas is legendary.

What spurred IBM to create its PC was the Apple II gaming business applications. Competition which the Soviet system lacked. Competition which to a degree China has enabled with success.

Placing top level wage limits is tinkering with a complex system that evolved over 200 years.

The Soviet system stigled initiative and competition. Argue otherwise? Go ahead, make my day...

That's exactly what I said. You regurgitate stupidly. My bone fides kick yours' ass anyway, but even if they didn't, your bumper sticker economics are poison from the 80s. I didn't say that the only option was fucking communism. Incentivizing creativity is clearly the point of the market. But if we let people drink from the magic money river, we also have to make them stop eventually. It's still an incentive even at 50% tax rates. I have rock solid evidence of that too. But it also doesn't matter. When r>g, you have a dysfunctional market in need of regulation and much higher progressive taxes.

 

[Loren Pechtel]

The biggest effect would be to greatly increase outsourcing. You would end up with management teams contracting out everything.

Would contractors be a cheaper option? Would quality be maintained when contractors come and go, not having any attachment to the business or its goods and services?

I'm thinking more along the lines of contracting out to smaller companies to do the actual jobs.

 

[Loren Pechtel]

Jesse Ventura recently had a clip going around the internet talking about a maximum wage.

I don't like that idea because it limits the drive to do more. That being said, I like the idea of a maximum wage ratio. The biggest issue people have is that CEOs in America are making 380 times (on average) the salary of their average worker. If you said that the average ratio had to be 100 (as an example), a CEO could still make an obscene amount of money, but they have the option of making more by paying their workforce more. In other words, your lowest paid employee makes $20,000 a year, the CEO can make $2,000,000. If the CEO wants to make $3,000,000...then they need to pay all of the lowest paid employees $30,000.

My question to you all would be, why wouldn't this work? Be my devil's advocates please!

The first thing I could see is that you would have to make the rule be based on total compensation and not just salary (as the CEO's typically make much more off stock options anyway). I would also think you would need to define it as lowest paid full time employee and highest paid full time employee....but then companies would turn around and only have part time employees (are there laws against that?).

I could see some corporations leaving the US based on this, but more importantly I could see them outsourcing many more jobs to try to get their lowest worker's pay up as all the lower paid jobs would be shipped out of the company...so we would have to include outsourced jobs as part of the lowest paid employees (which might then force jobs back...probably not I know). I'm not sure how to deal with this portion yet and would have to think it through more.

What I would also see though is that the American Middle Class (AMC) would grow and when the AMC grows and has spending power, the economy does well. As the economy does well, more American jobs would be created (my company only hires when we can't meet customer demand...not when there are tax breaks). Customer demand is driven by people with money to burn that want a product. This would then drive the ability for the CEO's to pay their employees more and make more money themselves. AMC does well, everyone does well.

Thoughts?

don't know but I think of a massively progressive tax on wealth, say, 90% of all assets over some ridiculously high number, say, $100m every 5 years or so would be a good idea.
I

Thus ensuring that wealth got turned into luxury spending instead of means of production. The result would be catastrophic in the long run. The ultra-rich are that way because of seeing things with a long time horizon. You're taking that away and thus taking away the incentive to plan ahead.

You might like the lack of a Wal-Mart but you would also take out basically every modern tech company.

 

[Axulus]

The biggest effect would be to greatly increase outsourcing. You would end up with management teams contracting out everything.

It is the perfect plan to create a permanent underclass. Dump all your low skilled employees for good, outsource and bring in automation. It is pretty much saying low skilled people are unworthy of a job, making a great many of them unemployable except for shitty jobs at mom and pops that don't make enough money to be subject to the rules. Google and Facebook I'm sure would love the idea, seeing as they need a lot of high skilled high pay workers.

 

[Sajara]

Jesse Ventura recently had a clip going around the internet talking about a maximum wage.

I don't like that idea because it limits the drive to do more. That being said, I like the idea of a maximum wage ratio. The biggest issue people have is that CEOs in America are making 380 times (on average) the salary of their average worker. If you said that the average ratio had to be 100 (as an example), a CEO could still make an obscene amount of money, but they have the option of making more by paying their workforce more. In other words, your lowest paid employee makes $20,000 a year, the CEO can make $2,000,000. If the CEO wants to make $3,000,000...then they need to pay all of the lowest paid employees $30,000.

My question to you all would be, why wouldn't this work? Be my devil's advocates please!

The first thing I could see is that you would have to make the rule be based on total compensation and not just salary (as the CEO's typically make much more off stock options anyway). I would also think you would need to define it as lowest paid full time employee and highest paid full time employee....but then companies would turn around and only have part time employees (are there laws against that?).

I could see some corporations leaving the US based on this, but more importantly I could see them outsourcing many more jobs to try to get their lowest worker's pay up as all the lower paid jobs would be shipped out of the company...so we would have to include outsourced jobs as part of the lowest paid employees (which might then force jobs back...probably not I know). I'm not sure how to deal with this portion yet and would have to think it through more.

What I would also see though is that the American Middle Class (AMC) would grow and when the AMC grows and has spending power, the economy does well. As the economy does well, more American jobs would be created (my company only hires when we can't meet customer demand...not when there are tax breaks). Customer demand is driven by people with money to burn that want a product. This would then drive the ability for the CEO's to pay their employees more and make more money themselves. AMC does well, everyone does well.

Thoughts?

don't know but I think of a massively progressive tax on wealth, say, 90% of all assets over some ridiculously high number, say, $100m every 5 years or so would be a good idea.
I

Thus ensuring that wealth got turned into luxury spending instead of means of production. The result would be catastrophic in the long run. The ultra-rich are that way because of seeing things with a long time horizon. You're taking that away and thus taking away the incentive to plan ahead.

You might like the lack of a Wal-Mart but you would also take out basically every modern tech company.

Sorry, but this post makes no sense. Wealth getting turned into spending (luxury or otherwise) is the point. Wealth going into production only happens when there is demand from those spending money on the production to do so (trust me, I've been in these conversations as management). Unless we can show how we can save money or attain more sales, no capex plan will go through.

 

[Sajara]

I don't know but I think of a massively progressive tax on wealth, say, 90% of all assets over some ridiculously high number, say, $100m every 5 years or so would be a good idea.

Unfortunately I don't think going that route would work. My state tried increasing the corporate taxes on corporations making $10 million or more, and we also have a progressive tax on the wealthy, and what is happening is the corporations are moving out of state.

I could see the same thing potentially happening at the federal level, but the markets are here (for now), and there is a stigma about completely moving out of the country, so I don't think they would do so entirely. This means the federal level would have to bear the burden of the progressive tax, but making it ridiculously huge won't work either.

If you set the max bracket from 39.6% to 42%, you can provide tax cuts of 2% each to the lower 4 brackets, keep the other brackets the same, and you not only keep the federal tax income coming in the same, but you put 50 billion back into the lower 90% of the populus....spending power = increased economy.

 

[Rhea]

Several of these responses seem to jump the middle by saying, "either I get to make 300x against the workers or it's communism with no incentive!"

I ponder at the viewpoint that says, "50X the bottom workers is no incentive. I need 300X and more! More! MORE!!!! or I will just move to Cambodia!"

I do agree that many of the mega rich do think that to themselves. But honestly, you really think they are going to move to Cambodia if a system forces them to only make 300X if they are NOT exploiting the bottom paid workers? Nah, they like their penthouses in Manhattan too much.

And this idea that if we only give companies more money, they'll invest in "means of production that will result in AMerican jobs!" is not supported by the evidence of the last 5 tax cuts. They see 100X and nothing disincentivises them from seeking 300X and they move jobs overseas NOT to stay afloat, but to move from 100X to 300X.

And their hoarded wealth increases - neither spent on job creating nor even luxury acquisitiveness. Look it up. Reagan tax cuts, Bush tax cuts, Trump tax cuts.

 

[poster]

Thanks ZiprHead.

In full disclosure, I am a Manager who makes considerably more than the manufacturing workers around me. I've managed to get about a half of them a raise of $1.50 an hour but not without push-back. It is like upper-management doesn't see the line workers as people, but instead as robots to push harder and faster, which goes so completely against my lean manufacturing background of working smarter, not harder.

Forcing the pay ratio is the only way I see things changing. Either that or somehow dragging the stock-holders out of the picture...but they come first over anything else in most American companies, which man is that backwards.

There is more to consider when it comes to wage increases. Worker's Compensation, for example. WC is based on what people earn and the category of work they do in regards to historical claims.

Example: I am in the carpet cleaning business. If I had to carry WC for myself (which I'm not required to by state law) my wages top out at $44,000, which means insurers will only go that high for workers comp coverage. For me alone at $44,000 my WC insurance premium is almost $600.00 monthly.

So, imagine, if you will, that I hire 5 employees who also work out in the field and make upwards of $44,000 annually and, declining coverage for myself, my WC insurance payment alone would be in the neighborhood of $3,000 per month. Now add to that all the other incentives and required expenses to hiring employees and you've got expenses that become nightmarish. Office workers and such cost less to cover because of the nature of their activities.

So, you see, the insurance requirments alone for hiring employees causes me to want to keep employee pay as low as possible.

 

[Sajara]

Thanks ZiprHead.

In full disclosure, I am a Manager who makes considerably more than the manufacturing workers around me. I've managed to get about a half of them a raise of $1.50 an hour but not without push-back. It is like upper-management doesn't see the line workers as people, but instead as robots to push harder and faster, which goes so completely against my lean manufacturing background of working smarter, not harder.

Forcing the pay ratio is the only way I see things changing. Either that or somehow dragging the stock-holders out of the picture...but they come first over anything else in most American companies, which man is that backwards.

There is more to consider when it comes to wage increases. Worker's Compensation, for example. WC is based on what people earn and the category of work they do in regards to historical claims.

Example: I am in the carpet cleaning business. If I had to carry WC for myself (which I'm not required to by state law) my wages top out at $44,000, which means insurers will only go that high for workers comp coverage. For me alone at $44,000 my WC insurance premium is almost $600.00 monthly.

So, imagine, if you will, that I hire 5 employees who also work out in the field and make upwards of $44,000 annually and, declining coverage for myself, my WC insurance payment alone would be in the neighborhood of $3,000 per month. Now add to that all the other incentives and required expenses to hiring employees and you've got expenses that become nightmarish. Office workers and such cost less to cover because of the nature of their activities.

So, you see, the insurance requirments alone for hiring employees causes me to want to keep employee pay as low as possible.

Which is another reason to have universal healthcare...but that could be another topic entirely (I'd chuck in universal education too).

 

[poster]

Thanks ZiprHead.

In full disclosure, I am a Manager who makes considerably more than the manufacturing workers around me. I've managed to get about a half of them a raise of $1.50 an hour but not without push-back. It is like upper-management doesn't see the line workers as people, but instead as robots to push harder and faster, which goes so completely against my lean manufacturing background of working smarter, not harder.

Forcing the pay ratio is the only way I see things changing. Either that or somehow dragging the stock-holders out of the picture...but they come first over anything else in most American companies, which man is that backwards.

There is more to consider when it comes to wage increases. Worker's Compensation, for example. WC is based on what people earn and the category of work they do in regards to historical claims.

Example: I am in the carpet cleaning business. If I had to carry WC for myself (which I'm not required to by state law) my wages top out at $44,000, which means insurers will only go that high for workers comp coverage. For me alone at $44,000 my WC insurance premium is almost $600.00 monthly.

So, imagine, if you will, that I hire 5 employees who also work out in the field and make upwards of $44,000 annually and, declining coverage for myself, my WC insurance payment alone would be in the neighborhood of $3,000 per month. Now add to that all the other incentives and required expenses to hiring employees and you've got expenses that become nightmarish. Office workers and such cost less to cover because of the nature of their activities.

So, you see, the insurance requirments alone for hiring employees causes me to want to keep employee pay as low as possible.

Which is another reason to have universal healthcare...but that could be another topic entirely (I'd chuck in universal education too).

I agree conditionally on both.

Education in the US needs a serious conversation. For example, why would I want to contribute to the education of a person who's been conditioned to think that after graduation that their mission is to suck every penny out of me that they can? Why would I want to pay to educate people like Donald Trump or Lee Iacocca, or Jamie Diamond, or Bill Clinton, or the surgeon that wants to charge me ridiculous amounts of money to operate on me? Just to mention a few.

Universal healthcare address some of the concerns of WC, but not all.

 

[Harry Bosch]

I started a company with a couple partners a couple years ago. It started well. However, we got tired of working 90 hours a week and found a CEO. He started well. But then he made a few terrible decisions. Drove several key employees to leave. Pissed off a major customer. Company dipped dramatically. We fired him, and took over again. Back to working major hours a week again. The trade war is hurting us. The cost of raw materials has risen dramatically (thanks Trump). But it has not risen for our foreign competitors. So we really can't raise our prices too much without losing market share.

Anyway, we are seeking a CEO. We'll pay top dollar for a great one. It will include great pay and substantial equity. We've been looking for a couple months. It's not easy to find the right CEO. We pay the highest wages and benefits in our space. Why should we be limited to how much we can offer the right person?? First off, as the majority shareholder now, why would I pay a CEO more than what I need to unless it was due to great need? High level CEOs who can perform are not easy to find...

 

[steve_bank]

30 years engineering experience from Intel and Lockheed to small family tech start ups you never heard of.
Far from armchair.

If you are arguing risk reward has not fueled computers and the rest then you are just ignorant or one of those communist hangers on. Look at the early competi0n in the auto industry. The competition between Boeing and Mcdonnell-Douglas is legendary.

What spurred IBM to create its PC was the Apple II gaming business applications. Competition which the Soviet system lacked. Competition which to a degree China has enabled with success.

Placing top level wage limits is tinkering with a complex system that evolved over 200 years.

The Soviet system stigled initiative and competition. Argue otherwise? Go ahead, make my day...

That's exactly what I said. You regurgitate stupidly. My bone fides kick yours' ass anyway, but even if they didn't, your bumper sticker economics are poison from the 80s. I didn't say that the only option was fucking communism. Incentivizing creativity is clearly the point of the market. But if we let people drink from the magic money river, we also have to make them stop eventually. It's still an incentive even at 50% tax rates. I have rock solid evidence of that too. But it also doesn't matter. When r>g, you have a dysfunctional market in need of regulation and much higher progressive taxes.

Without chnges moving forward I do mot think the system is sutainable ,ainly for reasons not connected to top level compensation.

Automation in many forms has reduced the need for skilled labor that used to provide living wages.

Top level compensation and corporate comesation are two differnt things.

The fact a CEO makes a lot more than the lowest worker really does not have an effect on overall wages. It mostly looks bad. Some may be overpaid. What you do not see is the level of responsibility and time demand of a CEO. Lee Aokoka saved Chrysler People at that level eat, drink, and breath work 24/7 with no letup.

Corporate profit and taxes s are another matter. R&D takes money. Profits are invested, it can not sit still as a pile of cash, inflation eats away at it. If you have a retirement plan it is growing with overall corporate profits. So as I said the economy is a dynamic living thing highly complex. Simply creating a wage ratio limit can and likely would have long term consequences.]]Looking at it like n engineer, the sytem of competion seelsmto lower opring costs. This icludes reducing the need for skolled labor and reducing labor needs, 'head count'.

Unrestrained population growth in a system that reduces need for labor is unworkable in the long term. IMOin the long term the question is about avoiding catastrophic collapse.

The other side is the expectation of continuous growth in wages and earning power. The economy does not need a lot of labor as it once did to produce necessities. The economy is based on consumption of unnecessary goods. In the 60s a middle class house might be 1000ft^2. Much more is expected today.

In terms of buying power the number of hours an average worked needed to work to buy a PC in the 80s is an order of magnitude less today.

The two economic issues today are health care and housing costs. That is what is driving wage issues. Back in the 80's in Hartford Ct I drove a cab and could afford a nice apartment.

 

[Testy Calibrate]

I started a company with a couple partners a couple years ago. It started well. However, we got tired of working 90 hours a week and found a CEO. He started well. But then he made a few terrible decisions. Drove several key employees to leave. Pissed off a major customer. Company dipped dramatically. We fired him, and took over again. Back to working major hours a week again. The trade war is hurting us. The cost of raw materials has risen dramatically (thanks Trump). But it has not risen for our foreign competitors. So we really can't raise our prices too much without losing market share.

Anyway, we are seeking a CEO. We'll pay top dollar for a great one. It will include great pay and substantial equity. We've been looking for a couple months. It's not easy to find the right CEO. We pay the highest wages and benefits in our space. Why should we be limited to how much we can offer the right person?? First off, as the majority shareholder now, why would I pay a CEO more than what I need to unless it was due to great need? High level CEOs who can perform are not easy to find...

This has been our experience too. Incentives matter. That's one reason why a massively progressive wealth tax would need to start at an absurdly high number. Say, $100m. At that point, incentives in wages/compensation are not involved. If you need more than that, our society has failed.

 

[Testy Calibrate]

30 years engineering experience from Intel and Lockheed to small family tech start ups you never heard of.
Far from armchair.

If you are arguing risk reward has not fueled computers and the rest then you are just ignorant or one of those communist hangers on. Look at the early competi0n in the auto industry. The competition between Boeing and Mcdonnell-Douglas is legendary.

What spurred IBM to create its PC was the Apple II gaming business applications. Competition which the Soviet system lacked. Competition which to a degree China has enabled with success.

Placing top level wage limits is tinkering with a complex system that evolved over 200 years.

The Soviet system stigled initiative and competition. Argue otherwise? Go ahead, make my day...

That's exactly what I said. You regurgitate stupidly. My bone fides kick yours' ass anyway, but even if they didn't, your bumper sticker economics are poison from the 80s. I didn't say that the only option was fucking communism. Incentivizing creativity is clearly the point of the market. But if we let people drink from the magic money river, we also have to make them stop eventually. It's still an incentive even at 50% tax rates. I have rock solid evidence of that too. But it also doesn't matter. When r>g, you have a dysfunctional market in need of regulation and much higher progressive taxes.

Without chnges moving forward I do mot think the system is sutainable ,ainly for reasons not connected to top level compensation.

Automation in many forms has reduced the need for skilled labor that used to provide living wages.

Top level compensation and corporate comesation are two differnt things.

The fact a CEO makes a lot more than the lowest worker really does not have an effect on overall wages. It mostly looks bad. Some may be overpaid. What you do not see is the level of responsibility and time demand of a CEO. Lee Aokoka saved Chrysler People at that level eat, drink, and breath work 24/7 with no letup.

Corporate profit and taxes s are another matter. R&D takes money. Profits are invested, it can not sit still as a pile of cash, inflation eats away at it. If you have a retirement plan it is growing with overall corporate profits. So as I said the economy is a dynamic living thing highly complex. Simply creating a wage ratio limit can and likely would have long term consequences.]]Looking at it like n engineer, the sytem of competion seelsmto lower opring costs. This icludes reducing the need for skolled labor and reducing labor needs, 'head count'.

Unrestrained population growth in a system that reduces need for labor is unworkable in the long term. IMOin the long term the question is about avoiding catastrophic collapse.

The other side is the expectation of continuous growth in wages and earning power. The economy does not need a lot of labor as it once did to produce necessities. The economy is based on consumption of unnecessary goods. In the 60s a middle class house might be 1000ft^2. Much more is expected today.

In terms of buying power the number of hours an average worked needed to work to buy a PC in the 80s is an order of magnitude less today.

The two economic issues today are health care and housing costs. That is what is driving wage issues. Back in the 80's in Hartford Ct I drove a cab and could afford a nice apartment.

Well, yes it does have an impact. Of course, you need strong unions as a counterpart. The rise of the multinational has changed the landscape and sovereignty anywhere is in jeopardy. If communities can't hold predators accountable then we just have a situation where vigilante justice becomes necessary and, frankly, we are basically already there. If we don't change some rules pretty soon, people will figure that out and we are all fucked. At least, that's how I see it. These wingnuts who have been killing people are basically seeing themselves as vigilantes. What happens when the real targets are identified and normal people discover that their options are violence or a world where they and their kids will suffer because of their inaction?

 

[Harry Bosch]

I started a company with a couple partners a couple years ago. It started well. However, we got tired of working 90 hours a week and found a CEO. He started well. But then he made a few terrible decisions. Drove several key employees to leave. Pissed off a major customer. Company dipped dramatically. We fired him, and took over again. Back to working major hours a week again. The trade war is hurting us. The cost of raw materials has risen dramatically (thanks Trump). But it has not risen for our foreign competitors. So we really can't raise our prices too much without losing market share.

Anyway, we are seeking a CEO. We'll pay top dollar for a great one. It will include great pay and substantial equity. We've been looking for a couple months. It's not easy to find the right CEO. We pay the highest wages and benefits in our space. Why should we be limited to how much we can offer the right person?? First off, as the majority shareholder now, why would I pay a CEO more than what I need to unless it was due to great need? High level CEOs who can perform are not easy to find...

This has been our experience too. Incentives matter. That's one reason why a massively progressive wealth tax would need to start at an absurdly high number. Say, $100m. At that point, incentives in wages/compensation are not involved. If you need more than that, our society has failed.

I do favor a progressive income tax. But I hate wealth taxes. Wealth is an arbitrary value that changes every day often based on opinions (home values, and etc.). Even wealth values in stock change dramatically every day. If Trump says something wacky and the market crashes 5% - wealth changes dramatically. Secondly, wealth doesn't equal cash. Volatility would increase substantially if people were required to liquidate each quarter to make tax payments. I favor a progressive tax on income as it is realized for most federal taxes. Secondly, many states already have a "wealth tax" on real estate to fund local schools.

 

[Worldtraveller]

My guess is it could have far reaching unintended consequences. Stock markets, profit motivated innovation. It would probably require a general restructuring of the sysm. ]

Getting a business off the ground requires a lot more than most realize. It is based on risk reward. Sart limiting the reward for risk and investment and personal initiative goes down.

The worse case scenario was the failure of Soviet economics.

China changed to allow for personal initiative and reward.We could easily end up with far more problems than we have today.

As someone who has started and run a small business, this is mostly untrue. I would like to see a cap.

So here's a funny thing about a lot of the right wingers who clamor about how bad this would be. A lot of them support the trumpster fire in chief. They think we should "make america great again". But when was america great according to them? Really...try to nail them down to a timeframe. Economically, that would put us probably in the late 50s/early 60s. No go check what the tax rates were, and check what the income inequality was (which is basically what this topic is about).

 

[Worldtraveller]

I started a company with a couple partners a couple years ago. It started well. However, we got tired of working 90 hours a week and found a CEO. He started well. But then he made a few terrible decisions. Drove several key employees to leave. Pissed off a major customer. Company dipped dramatically. We fired him, and took over again. Back to working major hours a week again. The trade war is hurting us. The cost of raw materials has risen dramatically (thanks Trump). But it has not risen for our foreign competitors. So we really can't raise our prices too much without losing market share.

Anyway, we are seeking a CEO. We'll pay top dollar for a great one. It will include great pay and substantial equity. We've been looking for a couple months. It's not easy to find the right CEO. We pay the highest wages and benefits in our space. Why should we be limited to how much we can offer the right person?? First off, as the majority shareholder now, why would I pay a CEO more than what I need to unless it was due to great need? High level CEOs who can perform are not easy to find...

I also have executive experience, although at a very small company. I would actually like to see a cap on CEO/worker pay. There are a couple of ways to make it 'fair' for the CEO still. Let's say most of your workforce works a straight 40 hours/wk. You base their salary on that. If you expect your CEO to work 60-80 hrs/week, you can make his base pay limited to 10x (or whatever) the base non executive pay is, but then allow hourly compensation, or just scale it based on that.

One thing you quickly learn working at that level though, is the difference between billable, and non-billable hours!

 

[Sajara]

I started a company with a couple partners a couple years ago. It started well. However, we got tired of working 90 hours a week and found a CEO. He started well. But then he made a few terrible decisions. Drove several key employees to leave. Pissed off a major customer. Company dipped dramatically. We fired him, and took over again. Back to working major hours a week again. The trade war is hurting us. The cost of raw materials has risen dramatically (thanks Trump). But it has not risen for our foreign competitors. So we really can't raise our prices too much without losing market share.

Anyway, we are seeking a CEO. We'll pay top dollar for a great one. It will include great pay and substantial equity. We've been looking for a couple months. It's not easy to find the right CEO. We pay the highest wages and benefits in our space. Why should we be limited to how much we can offer the right person?? First off, as the majority shareholder now, why would I pay a CEO more than what I need to unless it was due to great need? High level CEOs who can perform are not easy to find...

Harry, hear me out here for a second...why do you need a top paid CEO? Sounds like you might be better off hiring about 8 people instead and break up all the different functions of what you and your partners are doing so that you aren't working 90 hours a week.

There is a difference between high level CEOs and someone who can perform. Most CEOs I've met are not able to perform and the ones who can are typically very humble and realize their value comes directly from their employees (who actually do most of the work).

As for why you shouldn't offer whatever you want to offer to get the best of the best, you should, as long as you continue to pay your workers within a range that makes sense. If your workers find out you just hired a CEO for 10 million when they make $20,000...how do you think that would sit with them? Do you think morale would raise or lower?