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It would be interesting to see how much CEO compensation has increased when you control for firm size. My guess is it's still increased but not as dramatically.
by jeffreyrogers 9y ago
It would be interesting to see how much CEO compensation has increased when you control for firm size. My guess is it's still increased but not as dramatically. Given growing firm size and industry consolidation it makes sense that CEOs would get paid more. There's fewer of them and their responsibilities are larger.
I also disagree that CEOs are unskilled. Try putting a random Ivy League graduate in charge of Goldman Sachs. I don't think they would succeed.
There's undoubtedly rising inequality, but I don't think there's a single cause, nor a simple solution.
- nickpsecurity 9y agoThat would be interesting as I expect the gap to be with larger firms with more politics and administrative overhead in general. Far as skill, I'm not saying they're unskilled so much as not that much more skilled than managers or specialists that make tiny fractions of what they make. Goldman Sachs is so unusual I wouldn't use them for extrapolating general trends. They do hire tons of people much smarter than their CEO to do the work that leads to CEO's decisions but make way less. It fits my model as a data point. They do pay some of their clever employees small fortunes a lot more than some other companies, though. They also lobby Congress and infiltrate regulators which is how they negotiated the bailout. They're more scheming that most creating wage gaps. On a whole, nother level of creating problems. ;) Btw, been a long time. Hope you've been doing well, Jeffrey.
- jeffreyrogers 9y agoYep, I agree with those points. Thanks, I have been. I hope you have as well :)