7 ms·

CEOs made 299 times more than their average workers last year

51 points by intellaughs 5y ago

naikrovek 5y ago
I don't want this to happen, but as this continues over the next couple of decades, people are going to start thinking about Robespierre and start building guillotines. CEO productivity hasn't increased a single bit in the last 100 years, and worker productivity has increased a lot. For our efforts, we have to return to our offices after asking to continue to work from home and after proving that telecommuting en masse works just fine. With a perfect performance evaluation we get raises that are less than inflation. And worst of all, CEOs and other executive pay increases dramatically each and every year. At some point a critical number of people are going to notice this happening. I already see people talking about it in a few online communities. I don't know what's going to happen in the future, but generally, the worse things get, the worse the outcome will be.
- knuthsat 5y ago
  It’s such a shame that the rule makers do not see that if the system does not benefit the majority then they will be desperate enough to expand the rule set with violent acts and ultimately bring it down. French Revolution is definitely a display of lack of freedom followed by the rule of absolute power.
  - slindz 5y ago
    My concern is that they're aware of this and have paid plenty of attention to encouraging a docile population. Yes, I'm about to resume scrolling through my phone.
m0ck 5y ago
I am amazed, that it is always CEOs catching the heat and not football players, or pop stars who earn even "more undeserved" millions.
- emteycz 5y ago
  Or politicians and administration
  - jfengel 5y ago
    I can't speak to other countries, but in the US, politicians are not especially well paid. The President makes $400k; Senators and representatives get $174k. Top GS scale employees make $144k. It's certainly nothing to sneeze at, but many of them were making more before they went into politics. And most of them have to maintain two homes, one in DC and another in their district. It's a small multiple of US average worker salary, but less than one order of magnitude (except for the President, who makes as much as ~12 average Americans). Most are rich, but they were rich before. It's expensive to go into politics. It's not impossible to get into Congress without being rich, but most are.
    - effingwewt 5y ago
      Yea no. What politicians make on paper is a moot point. There's a reason they all listen to the special interests and lobbyists and not their constituents. Then there's the regulatory capture of being a politician then going to work for the companies that lobbied them. They start rich, they get richer.
- nugget 5y ago
  I remember hearing Matt Damon protest that CEOs made 100x more than their lowest paid workers. I did some quick math based on production crew salaries and at $20m (plus residuals) per movie he was making around 800x the lowest paid FTEs, even those in a union.
  - naikrovek 5y ago
    There's only one Matt Damon, though. CEOs are everywhere, and easily swapped out.
- shadowlight 5y ago
andreyk 5y ago
I have this hope that in a few hundred years when we look back at this stage of history, and in particular look back at this absurd level of economic inequality, it will seem about as silly as having kings or emperors be the basis of our political systems. Not in the sense that it does not make sense historically, but in the sense that it is utterly archaic and obviously both irrational and unfair, and will never again be the case.
- gpspake 5y ago
  I hope so too. The disappointing revelation that follows those reveries is that, if it does come to pass, we won't be around to see it. It reminds me of Why We Can't Wait by Dr. King... >Time itself is neutral; it can be used either destructively or constructively. More and more I feel that the people of ill will have used time much more effectively than have the people of good will. We will have to repent in this generation not merely for the hateful words and actions of the bad people but for the appalling silence of the good people. Human progress never rolls in on wheels of inevitability; it comes through the tireless efforts of men willing to work to be co-workers with God, and without this hard work, time itself becomes an ally of the forces of social stagnation. We must use time creatively, in the knowledge that the time is always ripe to do right.” ― Martin Luther King Jr., Why We Can't Wait
- deviledeggs 5y ago
  It's a repeat of the gilded age about 100 years ago. Unions are dead, gig jobs get around the worker protections that took us 80 years to win. The gap between the richest and the rest is as big as it was then. We need labor to rise up again and antitrust these robber barons
minikites 5y ago
https://twitter.com/danpriceseattle/status/1414379001334976517 https://twitter.com/danpriceseattle/status/14143790013349765... >Remember kids: if you study hard, get good grades, go to a good college, get a job, work hard, never take a sick day, live within your means and do what you're told ... then one day your boss might go to space It would be nice if we could use some of the unimaginable wealth of these CEOs to improve society, but enough people still believe in the myth of Horatio Alger that we choose not to tax billionaires because we somehow think it will discourage people from becoming billionaires.
- naikrovek 5y ago
  Dan Price is a person from a privileged family who is seeing things as they are, and I am thankful every day for him.
ur-whale 5y ago
In what way is this interesting? Is it making the average worker poorer? Or somehow more miserable (barring base jealousy)?
- rconti 5y ago
  > Is it making the average worker poorer? Almost certainly, yes. The economy is not a fixed pie, but unless it's the CEO driving the productivity gains of a company, there's no real reason to give them a more and more outsized share of the revenue. It could go to the workers, or the shareholders.
  - shadowlight 5y ago
    The economy is not a fixed pie but it's also not a source of unlimited riches. All production is limited by rate of available energy and/or available extraction of material. It is actually more accurate to say the economy is a fixed pie than it is to ludicrously say the economy is a source of infinite wealth.
- silicon2401 5y ago
  People have fundamentally different worldviews. Some people refuse to accept anybody having nice things unless everybody can have them. I personally don't care for dragging everyone down to the lowest common denominator, I'd rather focus on helping bring people up where feasible.
  - mcguire 5y ago
    Nah, mate. Admit it, we're all about getting the best we can for ourselves and devil take the hindmost.
    - silicon2401 5y ago
      I'll definitely agree that that applies for most people, including myself. Also don't think there's anything wrong with that. But I was more saying when people aim for equality, some take that to mean dragging everyone down first, and some take that to mean pulling everyone up first.
glial 5y ago
This is lower than recent historical numbers, isn't it? From what I've seen, it was >300 for a few periods over the past 20 years. Generally speaking, this is why I try to work/shop/bank with co-ops, credit unions, mutual insurances, and other not-for-profits.
thoughtstheseus 5y ago
This should be a reminder to compensate workers more broadly. If companies don’t do this, taxes + government redistribution will. Or people will revolt… they’d have little to lose.
thirdplace_ 5y ago
Note that these are S&P500 numbers.
xyst 5y ago
What does one person or family do with all of this money? What would the world look like if C-level executive pay was only 2X a regular employee?
- randyrand 5y ago
  Start more businesses. People start companies because that’s what they enjoy doing. ^ for Founder / CEOs
- boublepop 5y ago
  Nothing is stopping you from sending an application to become the CEO of Amazon, Google, Apple or Microsoft and noting that even though you might not be their ideal candidate you would be willing to do the job at 2X their median employee. I’m sure they’d be thrilled to save some money. These days it seems most of the extravagant CEO pay is going towards eccentrics wanting to build rockets, though I’m guessing a lot of them are more boring and just buying huge boats/mansions and wait staff etc, and then investing the rest in letting family and friends get by without working.
myprasanna 5y ago
Workers can become CEOs too? If it's just CEO hatred culture, then the job creators will move.
- tryingtogetback 5y ago
  It is CEO hatred culture which is being actively developed by socialists in hope to promote socialism: a very predictable desire to control the population by eliminating opportunity and thus free-thinkers and overachievers: forced equality where everyone should wear the same uniform, the same haircut, and make the same 15$ per month no matter your skills, abilities, or the situation at hand, with all Olympians in national Olympiads getting the same iron medals regardless of the results. Fortunately unachievable in US in the near future.
  - medvezhenok 5y ago
    Was the U.S. in the 1970s a socialist country? Or how about in the late 1940s?
    - tryingtogetback 5y ago
      Most certainly not, Медвежонок, and I doubt it will become one in the near future (although some aspects of it are already here). Nevertheless, it's always good to highlight socialist propaganda.
      - mcguire 5y ago
        "CEO-to-worker compensation ratio was 21-to-1 in 1965." (https://www.epi.org/publication/ceo-compensation-surged-14-in-2019-to-21-3-million-ceos-now-earn-320-times-as-much-as-a-typical-worker/ https://www.epi.org/publication/ceo-compensation-surged-14-i...) Apparently, we were significantly more socialist in the mid-1960s.
  - effingwewt 5y ago
    Ah yes, only the socialists hate CEOs, obviously these are the special people who deserve their ivory towers right? JFC the mental gymnastics never cease to amaze.
tryingtogetback 5y ago
It is also possible that globalization requires new management and coordination skills on a level that was never there before. To be able to make your company successful is one thing but to make it successful in multiple regions with globally distributed supply chains is a completely different story where complexities increase x299?
- mcguire 5y ago
  The really neat part is that they get paid even when they aren't making the company successful. (https://www.sec.gov/Archives/edgar/data/1310067/000119312517106498/d322255ddef14a.htm#tx322255_18 https://www.sec.gov/Archives/edgar/data/1310067/000119312517...)
  - tryingtogetback 5y ago
    Your comment doesn't really object. Do you know how many average workers are getting paid right now for doing basically nothing? A high percentage of average "jobs" in US are a form of UBI. Some are doing great things, some are kicking cans, CEOs are no different, CEOs are not robots (yet?).
credit_guy 5y ago
But is the calculation correct? For example according to these guys, the CEO of Aberocrombie & Fitch made $12 MM while the median worker made $1820, resulting in a ratio of 6565:1 [1] [1] https://aflcio.org/executive-paywatch/company-pay-ratios https://aflcio.org/executive-paywatch/company-pay-ratios
- hjalmaar 5y ago
  I'm curious what you think would be wrong with their calculations. A ratio of 299:1 will certainly include some large corporations with high ratios, but also many more smaller companies with substantially less revenue to pay their CEOs.
  - credit_guy 5y ago
    How can the median salary of an Aberocrombie employee be $1820? Per year. This is less than $1/hour, many times less than the minimum legal salary in the US. Out of curiosity, I just googled the average salary for Aberocrombie & Fitch. Indeed.com shows $23k for a “Stocking Associate” and $38k for a warehouse worker [1]. Hardly Silicon Valley-level salaries, but way above the bogus $1820 figure these guys used to get their 6565:1 ratio. [1] https://www.indeed.com/cmp/Abercrombie-&-Fitch/salaries https://www.indeed.com/cmp/Abercrombie-&-Fitch/salaries
yread 5y ago
It's gonna be OK guys, I'm working on reversing it - paying hundreds of euros/h to lawyers and contractors while paying myself 0
vanekjar 5y ago
This article is totally misleading. They compare top 500 CEOs (S&P 500) vs average worker. How about comparing apples to apples? What's the compensation of an average CEO from some random small company? Also total compensation is misleading measure, it's not money on the table. Often just stock options that may or may not vest in future.
tomjen3 5y ago
Everybody is up in arms about this, but it makes sense. The difference between hiring the best CEO and the next best CEO might only be 0.5% growth but on a scale of billions that is still a lot of money. More importantly, the cost of hiring a bad CEO is that you can lose it all. This means that CEOs with proven experience can drive up the price of CEOs drastically. Meanwhile if you hire 1000 people to work in your stores you are going to get an average and getting a little better than average is what you can hope for, so individual workers cannot press the price up.

51 points by intellaughs 5y ago

I don't want this to happen, but as this continues over the next couple of decades, people are going to start thinking about Robespierre and start building guillotines. CEO productivity hasn't increased a single bit in the last 100 years, and worker productivity has increased a lot. For our efforts, we have to return to our offices after asking to continue to work from home and after proving that telecommuting en masse works just fine. With a perfect performance evaluation we get raises that are less than inflation. And worst of all, CEOs and other executive pay increases dramatically each and every year. At some point a critical number of people are going to notice this happening. I already see people talking about it in a few online communities. I don't know what's going to happen in the future, but generally, the worse things get, the worse the outcome will be.

knuthsat 5y ago
It’s such a shame that the rule makers do not see that if the system does not benefit the majority then they will be desperate enough to expand the rule set with violent acts and ultimately bring it down. French Revolution is definitely a display of lack of freedom followed by the rule of absolute power.
- slindz 5y ago
  My concern is that they're aware of this and have paid plenty of attention to encouraging a docile population. Yes, I'm about to resume scrolling through my phone.

m0ck 5y ago

I am amazed, that it is always CEOs catching the heat and not football players, or pop stars who earn even "more undeserved" millions.

emteycz 5y ago
Or politicians and administration
- jfengel 5y ago
  I can't speak to other countries, but in the US, politicians are not especially well paid. The President makes $400k; Senators and representatives get $174k. Top GS scale employees make $144k. It's certainly nothing to sneeze at, but many of them were making more before they went into politics. And most of them have to maintain two homes, one in DC and another in their district. It's a small multiple of US average worker salary, but less than one order of magnitude (except for the President, who makes as much as ~12 average Americans). Most are rich, but they were rich before. It's expensive to go into politics. It's not impossible to get into Congress without being rich, but most are.
  - effingwewt 5y ago
    Yea no. What politicians make on paper is a moot point. There's a reason they all listen to the special interests and lobbyists and not their constituents. Then there's the regulatory capture of being a politician then going to work for the companies that lobbied them. They start rich, they get richer.
nugget 5y ago
I remember hearing Matt Damon protest that CEOs made 100x more than their lowest paid workers. I did some quick math based on production crew salaries and at $20m (plus residuals) per movie he was making around 800x the lowest paid FTEs, even those in a union.
- naikrovek 5y ago
  There's only one Matt Damon, though. CEOs are everywhere, and easily swapped out.
shadowlight 5y ago

andreyk 5y ago

I have this hope that in a few hundred years when we look back at this stage of history, and in particular look back at this absurd level of economic inequality, it will seem about as silly as having kings or emperors be the basis of our political systems. Not in the sense that it does not make sense historically, but in the sense that it is utterly archaic and obviously both irrational and unfair, and will never again be the case.

gpspake 5y ago
I hope so too. The disappointing revelation that follows those reveries is that, if it does come to pass, we won't be around to see it. It reminds me of Why We Can't Wait by Dr. King... >Time itself is neutral; it can be used either destructively or constructively. More and more I feel that the people of ill will have used time much more effectively than have the people of good will. We will have to repent in this generation not merely for the hateful words and actions of the bad people but for the appalling silence of the good people. Human progress never rolls in on wheels of inevitability; it comes through the tireless efforts of men willing to work to be co-workers with God, and without this hard work, time itself becomes an ally of the forces of social stagnation. We must use time creatively, in the knowledge that the time is always ripe to do right.” ― Martin Luther King Jr., Why We Can't Wait
deviledeggs 5y ago
It's a repeat of the gilded age about 100 years ago. Unions are dead, gig jobs get around the worker protections that took us 80 years to win. The gap between the richest and the rest is as big as it was then. We need labor to rise up again and antitrust these robber barons

minikites 5y ago

https://twitter.com/danpriceseattle/status/1414379001334976517 https://twitter.com/danpriceseattle/status/14143790013349765... >Remember kids: if you study hard, get good grades, go to a good college, get a job, work hard, never take a sick day, live within your means and do what you're told ... then one day your boss might go to space It would be nice if we could use some of the unimaginable wealth of these CEOs to improve society, but enough people still believe in the myth of Horatio Alger that we choose not to tax billionaires because we somehow think it will discourage people from becoming billionaires.

naikrovek 5y ago
Dan Price is a person from a privileged family who is seeing things as they are, and I am thankful every day for him.

ur-whale 5y ago

In what way is this interesting? Is it making the average worker poorer? Or somehow more miserable (barring base jealousy)?

rconti 5y ago
> Is it making the average worker poorer? Almost certainly, yes. The economy is not a fixed pie, but unless it's the CEO driving the productivity gains of a company, there's no real reason to give them a more and more outsized share of the revenue. It could go to the workers, or the shareholders.
- shadowlight 5y ago
  The economy is not a fixed pie but it's also not a source of unlimited riches. All production is limited by rate of available energy and/or available extraction of material. It is actually more accurate to say the economy is a fixed pie than it is to ludicrously say the economy is a source of infinite wealth.
silicon2401 5y ago
People have fundamentally different worldviews. Some people refuse to accept anybody having nice things unless everybody can have them. I personally don't care for dragging everyone down to the lowest common denominator, I'd rather focus on helping bring people up where feasible.
- mcguire 5y ago
  Nah, mate. Admit it, we're all about getting the best we can for ourselves and devil take the hindmost.
  - silicon2401 5y ago
    I'll definitely agree that that applies for most people, including myself. Also don't think there's anything wrong with that. But I was more saying when people aim for equality, some take that to mean dragging everyone down first, and some take that to mean pulling everyone up first.

glial 5y ago

This is lower than recent historical numbers, isn't it? From what I've seen, it was >300 for a few periods over the past 20 years. Generally speaking, this is why I try to work/shop/bank with co-ops, credit unions, mutual insurances, and other not-for-profits.

thoughtstheseus 5y ago

This should be a reminder to compensate workers more broadly. If companies don’t do this, taxes + government redistribution will. Or people will revolt… they’d have little to lose.

thirdplace_ 5y ago

Note that these are S&P500 numbers.

xyst 5y ago

What does one person or family do with all of this money? What would the world look like if C-level executive pay was only 2X a regular employee?

randyrand 5y ago
Start more businesses. People start companies because that’s what they enjoy doing. ^ for Founder / CEOs
boublepop 5y ago
Nothing is stopping you from sending an application to become the CEO of Amazon, Google, Apple or Microsoft and noting that even though you might not be their ideal candidate you would be willing to do the job at 2X their median employee. I’m sure they’d be thrilled to save some money. These days it seems most of the extravagant CEO pay is going towards eccentrics wanting to build rockets, though I’m guessing a lot of them are more boring and just buying huge boats/mansions and wait staff etc, and then investing the rest in letting family and friends get by without working.

myprasanna 5y ago

Workers can become CEOs too? If it's just CEO hatred culture, then the job creators will move.

tryingtogetback 5y ago
It is CEO hatred culture which is being actively developed by socialists in hope to promote socialism: a very predictable desire to control the population by eliminating opportunity and thus free-thinkers and overachievers: forced equality where everyone should wear the same uniform, the same haircut, and make the same 15$ per month no matter your skills, abilities, or the situation at hand, with all Olympians in national Olympiads getting the same iron medals regardless of the results. Fortunately unachievable in US in the near future.
- medvezhenok 5y ago
  Was the U.S. in the 1970s a socialist country? Or how about in the late 1940s?
  - tryingtogetback 5y ago
    Most certainly not, Медвежонок, and I doubt it will become one in the near future (although some aspects of it are already here). Nevertheless, it's always good to highlight socialist propaganda.
    - mcguire 5y ago
      "CEO-to-worker compensation ratio was 21-to-1 in 1965." (https://www.epi.org/publication/ceo-compensation-surged-14-in-2019-to-21-3-million-ceos-now-earn-320-times-as-much-as-a-typical-worker/ https://www.epi.org/publication/ceo-compensation-surged-14-i...) Apparently, we were significantly more socialist in the mid-1960s.
- effingwewt 5y ago
  Ah yes, only the socialists hate CEOs, obviously these are the special people who deserve their ivory towers right? JFC the mental gymnastics never cease to amaze.

tryingtogetback 5y ago

It is also possible that globalization requires new management and coordination skills on a level that was never there before. To be able to make your company successful is one thing but to make it successful in multiple regions with globally distributed supply chains is a completely different story where complexities increase x299?

mcguire 5y ago
The really neat part is that they get paid even when they aren't making the company successful. (https://www.sec.gov/Archives/edgar/data/1310067/000119312517106498/d322255ddef14a.htm#tx322255_18 https://www.sec.gov/Archives/edgar/data/1310067/000119312517...)
- tryingtogetback 5y ago
  Your comment doesn't really object. Do you know how many average workers are getting paid right now for doing basically nothing? A high percentage of average "jobs" in US are a form of UBI. Some are doing great things, some are kicking cans, CEOs are no different, CEOs are not robots (yet?).

credit_guy 5y ago

But is the calculation correct? For example according to these guys, the CEO of Aberocrombie & Fitch made $12 MM while the median worker made $1820, resulting in a ratio of 6565:1 [1] [1] https://aflcio.org/executive-paywatch/company-pay-ratios https://aflcio.org/executive-paywatch/company-pay-ratios

hjalmaar 5y ago
I'm curious what you think would be wrong with their calculations. A ratio of 299:1 will certainly include some large corporations with high ratios, but also many more smaller companies with substantially less revenue to pay their CEOs.
- credit_guy 5y ago
  How can the median salary of an Aberocrombie employee be $1820? Per year. This is less than $1/hour, many times less than the minimum legal salary in the US. Out of curiosity, I just googled the average salary for Aberocrombie & Fitch. Indeed.com shows $23k for a “Stocking Associate” and $38k for a warehouse worker [1]. Hardly Silicon Valley-level salaries, but way above the bogus $1820 figure these guys used to get their 6565:1 ratio. [1] https://www.indeed.com/cmp/Abercrombie-&-Fitch/salaries https://www.indeed.com/cmp/Abercrombie-&-Fitch/salaries

yread 5y ago

It's gonna be OK guys, I'm working on reversing it - paying hundreds of euros/h to lawyers and contractors while paying myself 0

vanekjar 5y ago

This article is totally misleading. They compare top 500 CEOs (S&P 500) vs average worker. How about comparing apples to apples? What's the compensation of an average CEO from some random small company? Also total compensation is misleading measure, it's not money on the table. Often just stock options that may or may not vest in future.

tomjen3 5y ago

Everybody is up in arms about this, but it makes sense. The difference between hiring the best CEO and the next best CEO might only be 0.5% growth but on a scale of billions that is still a lot of money. More importantly, the cost of hiring a bad CEO is that you can lose it all. This means that CEOs with proven experience can drive up the price of CEOs drastically. Meanwhile if you hire 1000 people to work in your stores you are going to get an average and getting a little better than average is what you can hope for, so individual workers cannot press the price up.