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I've recently been very intrigued about executive pay. Because your average work makes like, what, 1/1000 of what an executive makes. But those 1000 workers he

by debt 7y ago

I've recently been very intrigued about executive pay. Because your average work makes like, what, 1/1000 of what an executive makes. But those 1000 workers help that executive earn very high compensation, but then I guess managing 1000 workers is 1000 times more valuable than the work those workers do. But all that sounds like an idea an executive would invent to justify earning 1000x more than what an average worker makes.

jgeada 7y ago
> But all that sounds like an idea an executive would invent to justify earning 1000x more than what an average worker makes. Of course, and the recent absurd ratios of executive pay vs average workers are likely unsustainable. It is all part of the same echo chamber that gave us trickle down economics. Realistically, most people in charge of money are the ones that decide how to allocate it and, without any other constraints, will allocate themselves as much of it as possible, as there is virtually no one else at the negotiating table to object. There are very few truly independent boards that would interfere in this self-dealing, as most are a self-referential loops of executive relationships.
ArlenBales 7y ago
Does an executive manage workers? I thought executives manage managers, and managers manage the workers?
- mcbits 7y ago
  Workers dig holes. Managers dug holes. Executives decide if holes can be profitable. Directors know a general who needs a lot of holes dug for the empire's war effort.
souprock 7y ago
That isn't how it works out. Normally the executive gets far less than his workers get. Remember, there are many workers. When I divide the pay of Boeing's CEO by the number of Boeing workers, I get just $100 per year. I am confident that the typical worker earns far more than that. The CEO pay is insignificant. He could sacrifice his entire pay to give raises for the workers, and they wouldn't gain even 1%. Clearly, that CEO's work is not considered "1000 times more valuable than the work those workers do".
- jefftk 7y ago
  > 1000 times more valuable than the work those workers do With a salary of $23M, Boeing's CEO is paid ~1000x what a worker is paid, which is how I read it.
  - perl4ever 7y ago
    "managing 1000 workers is 1000 times more valuable than the work those workers do" sounds like it's referring to the total work. At least it's ambiguous and ill-phrased if it means one worker.
    - mlyle 7y ago
      That's the thing. If a top executive even makes the tiniest productivity impact across his organization compared to the next best candidate, he has enriched shareholders significantly compared to his comp. This is what makes competition for top executives intense, and fuels the crazy pay.
mikkergp 7y ago
I’ve always sort of thought of it in reverse. You dont pay an executive to work at your company, you pay them not to work at a different company. In this sense Executive pay and employee pay aren’t directly linked.

by debt 7y ago

jgeada 7y ago

> But all that sounds like an idea an executive would invent to justify earning 1000x more than what an average worker makes. Of course, and the recent absurd ratios of executive pay vs average workers are likely unsustainable. It is all part of the same echo chamber that gave us trickle down economics. Realistically, most people in charge of money are the ones that decide how to allocate it and, without any other constraints, will allocate themselves as much of it as possible, as there is virtually no one else at the negotiating table to object. There are very few truly independent boards that would interfere in this self-dealing, as most are a self-referential loops of executive relationships.

ArlenBales 7y ago

Does an executive manage workers? I thought executives manage managers, and managers manage the workers?

mcbits 7y ago
Workers dig holes. Managers dug holes. Executives decide if holes can be profitable. Directors know a general who needs a lot of holes dug for the empire's war effort.

souprock 7y ago

That isn't how it works out. Normally the executive gets far less than his workers get. Remember, there are many workers. When I divide the pay of Boeing's CEO by the number of Boeing workers, I get just $100 per year. I am confident that the typical worker earns far more than that. The CEO pay is insignificant. He could sacrifice his entire pay to give raises for the workers, and they wouldn't gain even 1%. Clearly, that CEO's work is not considered "1000 times more valuable than the work those workers do".

jefftk 7y ago
> 1000 times more valuable than the work those workers do With a salary of $23M, Boeing's CEO is paid ~1000x what a worker is paid, which is how I read it.
- perl4ever 7y ago
  "managing 1000 workers is 1000 times more valuable than the work those workers do" sounds like it's referring to the total work. At least it's ambiguous and ill-phrased if it means one worker.
  - mlyle 7y ago
    That's the thing. If a top executive even makes the tiniest productivity impact across his organization compared to the next best candidate, he has enriched shareholders significantly compared to his comp. This is what makes competition for top executives intense, and fuels the crazy pay.

mikkergp 7y ago

I’ve always sort of thought of it in reverse. You dont pay an executive to work at your company, you pay them not to work at a different company. In this sense Executive pay and employee pay aren’t directly linked.