6 ms·

Wage gap between CEOs and US workers jumped to 670-to-1 last year, study finds

35 points by mhoad 4y ago

uberwindung 4y ago
Qu’est-ce que le tiers état?
slater 4y ago
Ah well, yes, but y'see, they also work 670 times harder, y'see
- chii 4y ago
  Working harder doesn't mean you get paid more. The ceo being paid a lot doesn't imply they have to have worked harder to obtain it. The board determined the ceo pay , and the board represent the shareholders, who ultimately are the final arbiters of the value being generated by the ceo.
  - Gibbon1 4y ago
    > and the board represent the shareholders The board represents only some shareholders.
    - moistly 4y ago
      And the board often delegates compensation decisions to a third party. Said third party is incentivized to rationalize a higher compensation for the executive class, because that best ensures that they’ll be hired to do so again in the future.
      - formerkrogemp 4y ago
        And the auditors are paid by the company that they audit.. For risk of material misstatement, not fraud. A fraudulent company can still pay an auditor a significant sum, and the auditor won't look for fraud, only material misstatement. It's the "audit expectations gap."
      - Gibbon1 4y ago
        Yeah friend worked for an executive compensation firm for a while. It was all about justifying increasing the CEO's compensation to match what other companies were paying. There is also the problem of the incestuous you scratch my back I scratch yours nature of board membership.
        chii 4y ago
        > justifying increasing the CEO's compensation to match what other companies were paying. which is what market rate means right? If a good CEO is poached to a competitor, the company will lose out.
  - klyrs 4y ago
    Most boards I've looked at are composed of people with C-level titles. While members of the board might not have a direct conflict of interest for a particular CEO, most have an interest in normalizing extreme CEO salaries.
  - meatsauce 4y ago
    Let's be honest; most CEOs work smarter and lead these large companies to immense profitability. They, as leaders, are entitled to (in essence) a commission - a reward for the work they've done, the leadership, the right decisions, and pivoting necessary to realize opportunities. The "worker" doesn't and in many cases, can not do any of what I described. They are paid for a job at a fair market rate. To compare the two is to do two things. 1) display a willing ignorance of the dynamics and 2) telegraph a tired political whine.
- credit_guy 4y ago
  CEO's make very consequential decisions. 15 years ago Paul Graham declared Microsoft dead [1]. Today it is a 2 trillion dollar company, behind only Apple. How did that happen? 15 years ago Microsoft was the master of a technology that was already passee, the desktop OS. The new money-making technologies (search, social networks, internet commerce, smartphones) were dominated by other players (Google, Facebook, Amazon, Apple). They tried to compete (anybody remembers Zune?) but they just could not execute. Then they changed their CEO, and under Nadella they pivoted to cloud. Big time. So now they are one of the 3 big names in cloud (Amazon and Google being the other ones). Maybe there are other reason (Microsoft is an immensely complex company), but few could argue that Nadella had nothing to do with the turnaround. If he just worked as much as 670 regular engineers, then Microsoft would still be dying, if not already dead today. [1] http://www.paulgraham.com/microsoft.html http://www.paulgraham.com/microsoft.html
  - al_borland 4y ago
    Exactly this. 670 people pointed in the wrong direction aren’t going to be effective. The turnaround of Apple under Jobs was another example. They went from 3 months away from bankruptcy to the most valuable company in the world. The value multiplier of a world class CEO is huge. They being said, some of them suck and should be forced to pay the company back for how much harm they have done. Like Léo Apotheker, who spent a brief period as the CEO of HP… selling off the recently acquired WebOS and almost selling off their PC division. I can’t help but ponder what might have been if he didn’t sell WebOS and they had a CEO that invested hard in mobile and integrations with the desktop. We might have another viable mobile platform. That one bad decision likely cost HP more than their entire staff salary.
WisNorCan 4y ago
I find these articles lacking any nuance. “CEOs pandemic greed grab has sparked outrage among Americans across the political spectrum” Guess what the wage gap is between a software engineer in the US and the average worker in Cambodia? About 100x. The average salary in Cambodia is about $2000 per year. Is that wrong? Are engineers too greedy? No. Supply & demand for specific skills drive the rates in each market. * https://ips-cambodia.com/cambodia-average-salaries-2022/ https://ips-cambodia.com/cambodia-average-salaries-2022/
- gepardi 4y ago
  I think many engineers would gladly say that Cambodians deserve to, and should be paid a lot more. Your argument is also a comparison between two different economies. The comparison here is between two groups of people living in the same country, even working for the same company. I did the math at a previous job - the CEO would make in 20 minutes what I made in a year. Would that CEO say they I should get paid more? Also, many CEOs in the US might make what they do precisely because the laborers in Southeast Asia make such low wages.
  - WisNorCan 4y ago
    If you feel like your salary is too high compared to Cambodian workers, why don’t you do something about it? For example, donate 50% of it to a charity in Cambodia helping poor people?
    - deleted 4y ago
      [deleted]
    - anm89 4y ago
      No no no. You see, what you have to do is call other people greedy, and tell them to do something, that way you don't have to do anything yourself.
    - diob 4y ago
      https://thenib.com/wp-content/uploads/2019/08/mister-gotcha-4-9faefa-1.jpg https://thenib.com/wp-content/uploads/2019/08/mister-gotcha-...
formerkrogemp 4y ago
I don't think, given the often higher proportion of high earners here and those only inclined to technical articles, that one will find a receptive audience on this forum to arguments decrying high earners. As WisNorCan can so understandably attest and exemplify.
- WisNorCan 4y ago
  You might be surprised. I suspect people will be quick to identify the problem with CEO pay but not use the same logic to identify the problem with SWE pay.
  - formerkrogemp 4y ago
    Global inequality doesn't invalidate a rich nation's inequality. Both issues can exist and be addressed.
  - Cerium 4y ago
    SWE pay might be high, but in the same market it is 4 to 10x median earnings compared with 200 to 600x for a CEO. Even the gap between a CEO and a SWE is 6 times bigger than the gap between a SWE and a factory worker. Comparing between labor markets is not needed when there is a clear and present problem in a single market. Fixing a local problem should be more tractable than addressing global inequality.
    - WisNorCan 4y ago
      It depends on what the goal of the exercise is. There are substantially fewer CEOs relative to SWEs. If your goal is to help the most impoverished, you are better off reallocating salary from SWEs than CEOs.
- deleted 4y ago
  [deleted]
ChrisLomont 4y ago
This article compares the wages not of all CEOs, but of 300 of the best paid ones. Comparing the top tiny fraction of one side to millions on the other is sure to get headlines for outrage. BLS lists CEO pay avg as $200k. [1] I suspect if you compared the top 300 compensated employees you'd find they get massive multiples of median CEO pay too. [1] https://www.bls.gov/oes/current/oes111011.htm https://www.bls.gov/oes/current/oes111011.htm
- dkobran 4y ago
  > This article compares the wages not of all CEOs, but of 300 of the best paid ones. That is not true. The report analyzes “publicly held companies with the lowest median worker pay.” They describe the sample probably a dozen or so times in the report. > tiny fraction of one side to millions You are making this out to be a random sample of irrelevant companies. These are publicly traded companies of which there are a few thousand in total. The list includes companies such as Amazon, Target, Best Buy, Lowe’s, Estee Lauder, etc. Who’s trying to elicit outrage, you or them?
  - ChrisLomont 4y ago
    Me: "This article compares the wages not of all CEOs, but of 300 of the best paid ones." You: "That is not true." The article: "Report on 300 top US companies...." Tell me again this is not 300 of the best paid CEOs? After all, the fact is CEO average pay is only 212k. BLS is a much better source than the Guardian for salary data, after all. >You are making this out to be a random sample of irrelevant companies. It is most certainly not a random sample of companies, otherwise the result would mimic the actual data from BLS. This is specially selected data to get this result. It is a cherry picked sample of the very top end of the CEO salaries (300 of them out of over 200,000 of them that exist) compared to workers, but not all workers, only those that are among the lowest paid, again, to reach a shocking headline that creates outrage. Here's [1] the actual report. Note in the report they compare part time worker wages to fulltime CEOs - not an hourly rate or something a tiny bit more defensible - for example, they compare an annual wage of $224 (yes, you read that correct) for a part time worker at NuSkin to the CEO wage of $4m. They repeat this type of nonsense throughout the report. The dishonesty in the report to me is astounding - and it explains how they get the numbers to drive their headlines. Comparing a tiny fraction of top values from one dataset to all of another dataset is not exactly a valid statistical technique. Doing everything you can at each step to widen the result to get what you want is beyond simple stats misunderstanding - it's nutjob agenda driven lying. If someone did this to claim global warming was not real, or any of a zillion other false claims, people would (and should) cry foul. If I did this, picking the top 300 employee wages in the country (all well into the millions) and compared to all CEOs (avg pay 200k), obtaining the claim that workers make many multiples of CEO wages, you'd rightfully cry foul. So why the pitchforks and intellectual dishonesty when the data is manipulated this way? Because it gets a result you want to see? [1] https://ips-dc.org/wp-content/uploads/2022/06/report-executive-excess-2022.pdf https://ips-dc.org/wp-content/uploads/2022/06/report-executi...
ncmncm 4y ago
It is conventional to blame COVID for this ("billionaires got 40% richer during lockdown") but it really makes more sense to blame deliberate changes in policy enacted by the government in power over the past few years. Some of those take a while to manifest fully, and others are not rooted out immediately by the successive government. There can be a lot to clean up. The current administration is anyway not especially motivated to really turn things around.
- specialist 4y ago
  Yes and: bickering over policy choices serves to distract from reform, eg getting lost in the weeds. So I've settled on managing towards a number. I choose the gini coefficient, until a better measure of inequity (wealth distribtion) is apparent. I prescribe restoring the USA to its 1970s era value of 35. It was a reasonable deal working white men. Today, if we could loop in everyone, that'd be huge. Sure, lower is better; Norway's contemporary value of 25 is pretty sweet. By every (non-libertarian) account, Norwegian society is enviable. Any way. I don't care how we get back to 35. Repeated radical cachectomies is straightforward. I also support proposals for UBI, universal insurance, childcare support, pretty much every modern anti-proverty strategy, etc. -- Helpful chart showing wealth distribution across countries: https://en.wikipedia.org/wiki/Gini_coefficient#Of_income_distributions https://en.wikipedia.org/wiki/Gini_coefficient#Of_income_dis...

35 points by mhoad 4y ago

uberwindung 4y ago

Qu’est-ce que le tiers état?

slater 4y ago

Ah well, yes, but y'see, they also work 670 times harder, y'see

chii 4y ago
Working harder doesn't mean you get paid more. The ceo being paid a lot doesn't imply they have to have worked harder to obtain it. The board determined the ceo pay , and the board represent the shareholders, who ultimately are the final arbiters of the value being generated by the ceo.
- Gibbon1 4y ago
  > and the board represent the shareholders The board represents only some shareholders.
  - moistly 4y ago
    And the board often delegates compensation decisions to a third party. Said third party is incentivized to rationalize a higher compensation for the executive class, because that best ensures that they’ll be hired to do so again in the future.
    - formerkrogemp 4y ago
      And the auditors are paid by the company that they audit.. For risk of material misstatement, not fraud. A fraudulent company can still pay an auditor a significant sum, and the auditor won't look for fraud, only material misstatement. It's the "audit expectations gap."
    - Gibbon1 4y ago
      Yeah friend worked for an executive compensation firm for a while. It was all about justifying increasing the CEO's compensation to match what other companies were paying. There is also the problem of the incestuous you scratch my back I scratch yours nature of board membership.
      - chii 4y ago
        > justifying increasing the CEO's compensation to match what other companies were paying. which is what market rate means right? If a good CEO is poached to a competitor, the company will lose out.
- klyrs 4y ago
  Most boards I've looked at are composed of people with C-level titles. While members of the board might not have a direct conflict of interest for a particular CEO, most have an interest in normalizing extreme CEO salaries.
- meatsauce 4y ago
  Let's be honest; most CEOs work smarter and lead these large companies to immense profitability. They, as leaders, are entitled to (in essence) a commission - a reward for the work they've done, the leadership, the right decisions, and pivoting necessary to realize opportunities. The "worker" doesn't and in many cases, can not do any of what I described. They are paid for a job at a fair market rate. To compare the two is to do two things. 1) display a willing ignorance of the dynamics and 2) telegraph a tired political whine.
credit_guy 4y ago
CEO's make very consequential decisions. 15 years ago Paul Graham declared Microsoft dead [1]. Today it is a 2 trillion dollar company, behind only Apple. How did that happen? 15 years ago Microsoft was the master of a technology that was already passee, the desktop OS. The new money-making technologies (search, social networks, internet commerce, smartphones) were dominated by other players (Google, Facebook, Amazon, Apple). They tried to compete (anybody remembers Zune?) but they just could not execute. Then they changed their CEO, and under Nadella they pivoted to cloud. Big time. So now they are one of the 3 big names in cloud (Amazon and Google being the other ones). Maybe there are other reason (Microsoft is an immensely complex company), but few could argue that Nadella had nothing to do with the turnaround. If he just worked as much as 670 regular engineers, then Microsoft would still be dying, if not already dead today. [1] http://www.paulgraham.com/microsoft.html http://www.paulgraham.com/microsoft.html
- al_borland 4y ago
  Exactly this. 670 people pointed in the wrong direction aren’t going to be effective. The turnaround of Apple under Jobs was another example. They went from 3 months away from bankruptcy to the most valuable company in the world. The value multiplier of a world class CEO is huge. They being said, some of them suck and should be forced to pay the company back for how much harm they have done. Like Léo Apotheker, who spent a brief period as the CEO of HP… selling off the recently acquired WebOS and almost selling off their PC division. I can’t help but ponder what might have been if he didn’t sell WebOS and they had a CEO that invested hard in mobile and integrations with the desktop. We might have another viable mobile platform. That one bad decision likely cost HP more than their entire staff salary.

WisNorCan 4y ago

I find these articles lacking any nuance. “CEOs pandemic greed grab has sparked outrage among Americans across the political spectrum” Guess what the wage gap is between a software engineer in the US and the average worker in Cambodia? About 100x. The average salary in Cambodia is about $2000 per year. Is that wrong? Are engineers too greedy? No. Supply & demand for specific skills drive the rates in each market. * https://ips-cambodia.com/cambodia-average-salaries-2022/ https://ips-cambodia.com/cambodia-average-salaries-2022/

gepardi 4y ago
I think many engineers would gladly say that Cambodians deserve to, and should be paid a lot more. Your argument is also a comparison between two different economies. The comparison here is between two groups of people living in the same country, even working for the same company. I did the math at a previous job - the CEO would make in 20 minutes what I made in a year. Would that CEO say they I should get paid more? Also, many CEOs in the US might make what they do precisely because the laborers in Southeast Asia make such low wages.
- WisNorCan 4y ago
  If you feel like your salary is too high compared to Cambodian workers, why don’t you do something about it? For example, donate 50% of it to a charity in Cambodia helping poor people?
  - deleted 4y ago
    [deleted]
  - anm89 4y ago
    No no no. You see, what you have to do is call other people greedy, and tell them to do something, that way you don't have to do anything yourself.
  - diob 4y ago
    https://thenib.com/wp-content/uploads/2019/08/mister-gotcha-4-9faefa-1.jpg https://thenib.com/wp-content/uploads/2019/08/mister-gotcha-...

formerkrogemp 4y ago

I don't think, given the often higher proportion of high earners here and those only inclined to technical articles, that one will find a receptive audience on this forum to arguments decrying high earners. As WisNorCan can so understandably attest and exemplify.

WisNorCan 4y ago
You might be surprised. I suspect people will be quick to identify the problem with CEO pay but not use the same logic to identify the problem with SWE pay.
- formerkrogemp 4y ago
  Global inequality doesn't invalidate a rich nation's inequality. Both issues can exist and be addressed.
- Cerium 4y ago
  SWE pay might be high, but in the same market it is 4 to 10x median earnings compared with 200 to 600x for a CEO. Even the gap between a CEO and a SWE is 6 times bigger than the gap between a SWE and a factory worker. Comparing between labor markets is not needed when there is a clear and present problem in a single market. Fixing a local problem should be more tractable than addressing global inequality.
  - WisNorCan 4y ago
    It depends on what the goal of the exercise is. There are substantially fewer CEOs relative to SWEs. If your goal is to help the most impoverished, you are better off reallocating salary from SWEs than CEOs.
deleted 4y ago
[deleted]

ChrisLomont 4y ago

This article compares the wages not of all CEOs, but of 300 of the best paid ones. Comparing the top tiny fraction of one side to millions on the other is sure to get headlines for outrage. BLS lists CEO pay avg as $200k. [1] I suspect if you compared the top 300 compensated employees you'd find they get massive multiples of median CEO pay too. [1] https://www.bls.gov/oes/current/oes111011.htm https://www.bls.gov/oes/current/oes111011.htm

dkobran 4y ago
> This article compares the wages not of all CEOs, but of 300 of the best paid ones. That is not true. The report analyzes “publicly held companies with the lowest median worker pay.” They describe the sample probably a dozen or so times in the report. > tiny fraction of one side to millions You are making this out to be a random sample of irrelevant companies. These are publicly traded companies of which there are a few thousand in total. The list includes companies such as Amazon, Target, Best Buy, Lowe’s, Estee Lauder, etc. Who’s trying to elicit outrage, you or them?
- ChrisLomont 4y ago
  Me: "This article compares the wages not of all CEOs, but of 300 of the best paid ones." You: "That is not true." The article: "Report on 300 top US companies...." Tell me again this is not 300 of the best paid CEOs? After all, the fact is CEO average pay is only 212k. BLS is a much better source than the Guardian for salary data, after all. >You are making this out to be a random sample of irrelevant companies. It is most certainly not a random sample of companies, otherwise the result would mimic the actual data from BLS. This is specially selected data to get this result. It is a cherry picked sample of the very top end of the CEO salaries (300 of them out of over 200,000 of them that exist) compared to workers, but not all workers, only those that are among the lowest paid, again, to reach a shocking headline that creates outrage. Here's [1] the actual report. Note in the report they compare part time worker wages to fulltime CEOs - not an hourly rate or something a tiny bit more defensible - for example, they compare an annual wage of $224 (yes, you read that correct) for a part time worker at NuSkin to the CEO wage of $4m. They repeat this type of nonsense throughout the report. The dishonesty in the report to me is astounding - and it explains how they get the numbers to drive their headlines. Comparing a tiny fraction of top values from one dataset to all of another dataset is not exactly a valid statistical technique. Doing everything you can at each step to widen the result to get what you want is beyond simple stats misunderstanding - it's nutjob agenda driven lying. If someone did this to claim global warming was not real, or any of a zillion other false claims, people would (and should) cry foul. If I did this, picking the top 300 employee wages in the country (all well into the millions) and compared to all CEOs (avg pay 200k), obtaining the claim that workers make many multiples of CEO wages, you'd rightfully cry foul. So why the pitchforks and intellectual dishonesty when the data is manipulated this way? Because it gets a result you want to see? [1] https://ips-dc.org/wp-content/uploads/2022/06/report-executive-excess-2022.pdf https://ips-dc.org/wp-content/uploads/2022/06/report-executi...

ncmncm 4y ago

It is conventional to blame COVID for this ("billionaires got 40% richer during lockdown") but it really makes more sense to blame deliberate changes in policy enacted by the government in power over the past few years. Some of those take a while to manifest fully, and others are not rooted out immediately by the successive government. There can be a lot to clean up. The current administration is anyway not especially motivated to really turn things around.

specialist 4y ago
Yes and: bickering over policy choices serves to distract from reform, eg getting lost in the weeds. So I've settled on managing towards a number. I choose the gini coefficient, until a better measure of inequity (wealth distribtion) is apparent. I prescribe restoring the USA to its 1970s era value of 35. It was a reasonable deal working white men. Today, if we could loop in everyone, that'd be huge. Sure, lower is better; Norway's contemporary value of 25 is pretty sweet. By every (non-libertarian) account, Norwegian society is enviable. Any way. I don't care how we get back to 35. Repeated radical cachectomies is straightforward. I also support proposals for UBI, universal insurance, childcare support, pretty much every modern anti-proverty strategy, etc. -- Helpful chart showing wealth distribution across countries: https://en.wikipedia.org/wiki/Gini_coefficient#Of_income_distributions https://en.wikipedia.org/wiki/Gini_coefficient#Of_income_dis...