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"CEO pay is getting larger because the companies are getting larger" Like Borders? The increase in pay doesn't appear to be based on anything sane.

by jshen 16y ago

curt 16y ago
You also have corporate governance problems where the CEO gets to pick far too many of his friends that leads to some distortion. Are movie stars salaries sane? Basketball players? The market pays what it sees fit, I'd say a $20 million/yr CEO creates far more than a $20 million/yr athlete or movie star.
- jshen 16y ago
  "The market pays what it sees fit" There is no such thing as "The Market", there are markets, all of which are composed of arbitrary rules created by people. They are all corruptible, and the question here is if ours is being corrupted and is in need of some systemic changes.
  - curt 16y ago
    Yes it is corrupted by government regulations and interference that have distorted the pricing effect that makes markets work. These are basic economic principles. The problem is people don't understand the pricing effect. When you do it's obvious why problems such as health care exist or why increasing tax rate doesn't increase revenue (Hauser's Law, tax revenue is 18% of GDP no matter what tax rates are).
    - jshen 16y ago
      "tax revenue is 18% of GDP no matter what tax rates are" Not really. http://www.angrybearblog.com/2010/11/hausers-law-is-extremely-misleading.html http://www.angrybearblog.com/2010/11/hausers-law-is-extremel... "it is corrupted by government regulation" It is corrupted by people. If we had no government it would still be corruptible. "These are basic economic principles." Like if I have a bigger gun than you, I get the rewards? Oh, you mean principles that we agree to in the form of government? Principles which are arbitrary and chosen by humans and vary from market to market! Yes, those "principles".
  - jshen 16y ago
    A question for the people voting me down, do you believe there is some singular market that is a law of nature? If not, then why do you disagree with my comment?
netcan 16y ago
I'm not necessarily on the "CEO salaries are sane" side but.. Failure does not mean that salaries should necessarily be low. If you take the argument(s) above (1% profit increase is worth $100m to a $10b company), it applies equally to negative salaries. When you have such big companies, the best possible CEO is worth a lot (in dollar terms) more than the next best one. I think correct question is are CEOs being selected for these sorts of reasons or are they being selected for other reasons. Is the system corrupt?

"CEO pay is getting larger because the companies are getting larger" Like Borders? The increase in pay doesn't appear to be based on anything sane.

by jshen 16y ago

"CEO pay is getting larger because the companies are getting larger" Like Borders? The increase in pay doesn't appear to be based on anything sane.

curt 16y ago

You also have corporate governance problems where the CEO gets to pick far too many of his friends that leads to some distortion. Are movie stars salaries sane? Basketball players? The market pays what it sees fit, I'd say a $20 million/yr CEO creates far more than a $20 million/yr athlete or movie star.

jshen 16y ago
"The market pays what it sees fit" There is no such thing as "The Market", there are markets, all of which are composed of arbitrary rules created by people. They are all corruptible, and the question here is if ours is being corrupted and is in need of some systemic changes.
- curt 16y ago
  Yes it is corrupted by government regulations and interference that have distorted the pricing effect that makes markets work. These are basic economic principles. The problem is people don't understand the pricing effect. When you do it's obvious why problems such as health care exist or why increasing tax rate doesn't increase revenue (Hauser's Law, tax revenue is 18% of GDP no matter what tax rates are).
  - jshen 16y ago
    "tax revenue is 18% of GDP no matter what tax rates are" Not really. http://www.angrybearblog.com/2010/11/hausers-law-is-extremely-misleading.html http://www.angrybearblog.com/2010/11/hausers-law-is-extremel... "it is corrupted by government regulation" It is corrupted by people. If we had no government it would still be corruptible. "These are basic economic principles." Like if I have a bigger gun than you, I get the rewards? Oh, you mean principles that we agree to in the form of government? Principles which are arbitrary and chosen by humans and vary from market to market! Yes, those "principles".
- jshen 16y ago
  A question for the people voting me down, do you believe there is some singular market that is a law of nature? If not, then why do you disagree with my comment?

netcan 16y ago

I'm not necessarily on the "CEO salaries are sane" side but.. Failure does not mean that salaries should necessarily be low. If you take the argument(s) above (1% profit increase is worth $100m to a $10b company), it applies equally to negative salaries. When you have such big companies, the best possible CEO is worth a lot (in dollar terms) more than the next best one. I think correct question is are CEOs being selected for these sorts of reasons or are they being selected for other reasons. Is the system corrupt?