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Those statistics about CEO pay growth are often deceptive. If you sample the top N firms over time, where N is fixed, the mean market cap of those N firms will

Those statistics about CEO pay growth are often deceptive. If you sample the top N firms over time, where N is fixed, the mean market cap of those N firms will be growing, given that the economy has grown over the time window. That the average compensation of the CEO of these sampled firms is also growing is unsurprising. The omitted variable that causes this statistical illusion is GDP growth itself. Now, even with a non-flawed methodology, I don't doubt that we'd still find that CEO pay has gone up a lot more than other job types. But that should be true for knowledge work in general, especially high-demand + low-supply roles. There has been large structural changes in the economic system that causes this. Mainly, China has come online, meaning the non-knowledge workers in wealthy countries must compete with a billion extra people, which depresses their compensation in the labor market, which increases the ratio of a CEO's pay divided by the pay of non-CEOs. A non-market based explanation is highly suspect and should not be the default explanation. You are basically claiming that shareholders are willingly giving away their own money for no good reason. Why would shareholders do this? They are not running a charity. The simplest and least nefarious explanation is the most likely: Shareholders believe the CEOs are worth that much in the context of current (2023, not the 1970s) supply and demand dynamics in the labor market for highly niche highly impactful CEO positions. If I own an asset worth $2 trillion, I do not care about paying $100 million for someone to not ruin it. > If you replaced most CEOs with any reasonably thoughtful and educated person, you wouldn't see much change overall in the average performance of businesses. At least recognize this is a speculative claim made without evidence. More of a hunch. A hunch that I disagree with.

danaris 4y ago
That's a lot of words to try and justify CEO/worker pay discrepancies of a factor of over 300. All that bullshit about statistical illusions doesn't change the fact that the median worker in America has barely seen any real wage growth for 50 years, and all that extra wealth went straight to the wealthiest people in the country. Many of those are the CEOs we're discussing. Income and wealth inequality of this level are genuinely harmful to the economy and to the political system, and every bit of effort you put into justifying them, rather than admitting that it is wrong and harmful, is effort being put into actively making the world a worse place.
- hackerlight 4y ago
  It was a lot of words because you made a lot of factually false claims, so that's to be expected as per Brandolini's Law. I appreciate that you brought moral certainty into this discussion, but that doesn't make your understanding of reality or factual premise correct, even if your moral conclusion may be correct by accident. > doesn't change the fact that the median worker in America has barely seen any real wage growth for 50 years, and all that extra wealth went straight to the wealthiest people in the country. Fist in the air != explanation. Depressed wage growth has little to do with managerial compensation. If you want an explanation based in fact rather than anger, you have to look at the labor market economics of the situation, which you aren't.
  - amrocha 4y ago
    If you want an explanation based in fact rather than blind faith in market theory, you have to look at the capitalist labor relations side of it too, which you aren't.

danaris 4y ago

That's a lot of words to try and justify CEO/worker pay discrepancies of a factor of over 300. All that bullshit about statistical illusions doesn't change the fact that the median worker in America has barely seen any real wage growth for 50 years, and all that extra wealth went straight to the wealthiest people in the country. Many of those are the CEOs we're discussing. Income and wealth inequality of this level are genuinely harmful to the economy and to the political system, and every bit of effort you put into justifying them, rather than admitting that it is wrong and harmful, is effort being put into actively making the world a worse place.

hackerlight 4y ago
It was a lot of words because you made a lot of factually false claims, so that's to be expected as per Brandolini's Law. I appreciate that you brought moral certainty into this discussion, but that doesn't make your understanding of reality or factual premise correct, even if your moral conclusion may be correct by accident. > doesn't change the fact that the median worker in America has barely seen any real wage growth for 50 years, and all that extra wealth went straight to the wealthiest people in the country. Fist in the air != explanation. Depressed wage growth has little to do with managerial compensation. If you want an explanation based in fact rather than anger, you have to look at the labor market economics of the situation, which you aren't.
- amrocha 4y ago
  If you want an explanation based in fact rather than blind faith in market theory, you have to look at the capitalist labor relations side of it too, which you aren't.