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> the extra money could contribute to the middle class' wage. Aggregate CEO pay at the largest 350 firms in the US was $6 billion in 2018[1]. Let's quadruple t

> the extra money could contribute to the middle class' wage. Aggregate CEO pay at the largest 350 firms in the US was $6 billion in 2018[1]. Let's quadruple that to account for the remainder of large firms and other C-suite executives. Let's assume all of CEO compensation is entirely rent-seeking, CEOs don't add anything of economic value, and we can just redistribute their compensation to every man, woman and child in the US with no loss of GDP. In total that would represent an income gain of only $72 per year for the median person. CEO pay may be symbolically important, but it's simply inconceivable that rising CEO compensation has had any meaningful impact on middle class wages. [1] https://www.epi.org/publication/ceo-compensation-2018/ https://www.epi.org/publication/ceo-compensation-2018/

rayiner 7y ago
A average CEO pay in the Fortune 500 is 14.5 million: https://aflcio.org/paywatch https://aflcio.org/paywatch. That’s $7.2 billion total. The Fortune 500 employs 26 million people. If you paid CEOs zero and redistributed it all, everyone would get a raise of about $277 per year.
- dcolkitt 7y ago
  The median annual compensation for the median Fortune 500 company is $72,000 per year.[1] So total redistribution would represent an increase of 0.3% to the take-home pay of the average big company worker. Again, no matter how you want to slice it, aggregate CEO pay is simply too small in magnitude relative to aggregate American salaries to have any meaningful impact. At most you could say something about it being symptomatic of a larger problem, but CEO pay is absolutely not the direct cause of slow growth in wages. [1] https://www.usatoday.com/story/money/business/2018/05/25/ceos-11-million-year-salary-just-middle-pack/643823002/ https://www.usatoday.com/story/money/business/2018/05/25/ceo...
  - AstralStorm 7y ago
    I'd say lobbying and voting with money is, and CEOs are responsible for it. The richer they are, the less they care about wage or product, the more they care about extracting rent - via investment or cuts, causing stock market reactions, which ignore all those things. They tend to also lose the common touch, just like the aristocracy that preceded them.
james_s_tayler 7y ago
CEOs don't add anything of economic value? Riiiiiight.
- dcolkitt 7y ago
  In case it wasn't clear, I'm not making that claim. I'm simply laying out the most generous conceivable case to show why it's mathematically impossible for CEO compensation to directly explain slow secular growth in wages.

rayiner 7y ago

A average CEO pay in the Fortune 500 is 14.5 million: https://aflcio.org/paywatch https://aflcio.org/paywatch. That’s $7.2 billion total. The Fortune 500 employs 26 million people. If you paid CEOs zero and redistributed it all, everyone would get a raise of about $277 per year.

dcolkitt 7y ago
The median annual compensation for the median Fortune 500 company is $72,000 per year.[1] So total redistribution would represent an increase of 0.3% to the take-home pay of the average big company worker. Again, no matter how you want to slice it, aggregate CEO pay is simply too small in magnitude relative to aggregate American salaries to have any meaningful impact. At most you could say something about it being symptomatic of a larger problem, but CEO pay is absolutely not the direct cause of slow growth in wages. [1] https://www.usatoday.com/story/money/business/2018/05/25/ceos-11-million-year-salary-just-middle-pack/643823002/ https://www.usatoday.com/story/money/business/2018/05/25/ceo...
- AstralStorm 7y ago
  I'd say lobbying and voting with money is, and CEOs are responsible for it. The richer they are, the less they care about wage or product, the more they care about extracting rent - via investment or cuts, causing stock market reactions, which ignore all those things. They tend to also lose the common touch, just like the aristocracy that preceded them.

james_s_tayler 7y ago

CEOs don't add anything of economic value? Riiiiiight.

dcolkitt 7y ago
In case it wasn't clear, I'm not making that claim. I'm simply laying out the most generous conceivable case to show why it's mathematically impossible for CEO compensation to directly explain slow secular growth in wages.