20 ms·

Striking auto workers want a 40% pay increase–the same rate their CEOs’ pay grew

• 1970-01-01 3y ago
  Imagine a FAANG software union asking for 40% more pay for devs, to match the CEOs'.
  • Mistletoe 3y ago
    I’m assuming auto workers don’t make 400k a year already.
  • umeshunni 3y ago
    I got an average 20% annual TC increase every year of the decade I worked at a FAANG, so 40% over 4 years would be well below average.
• mortureb 3y ago
  40%? I sincerely wish them the best of luck and I hope they get what is their due but this is probably good news for India, Mexico and China.
  • mschuster91 3y ago
    So what, nothing prohibits the US and Europe from raising tariffs on industrial products. The pendulum of globalization is bound to swing backwards for a multitude of reasons.
    • mortureb 3y ago
      Isn’t that what leads to Ladas and Trabants.
    • thriftwy 3y ago
      cough WTO cough
      • mschuster91 3y ago
        The WTO has been fucked over for years now. Practically they've been kneecapped since 2019 "thanks" to the 45th [1], and even before that, they didn't do much against the clear breaches of good conduct that China committed, and for what it's worth it's not like the actions of the 45th were without good cause, even back under Bush the WTO was infamous for being slow as molasses even compared to other international organizations and having failed to update their rulebook because everyone and their dog kept vetoing stuff. [1] https://www.theguardian.com/australia-news/2022/dec/25/australia-and-china-team-up-to-protest-wto-blockages-caused-by-us-vetoes-on-appeal-body https://www.theguardian.com/australia-news/2022/dec/25/austr...
        • thriftwy 3y ago
          I'm just amazed how, with enough money invested into propaganda of economic liberalism (still a paltry sum in the grand order of things), you can have smart people around the world repeating your mantras without noticing for decades that you have not even pretended to live up to your own faith. Many of them acolytes actually ruining their domestic economy by executing on these principles.
          • mschuster91 3y ago
            The problem is, the propaganda was all just propaganda in the end. Yes, we got cheap trinkets out of China, but at what price? Insane amounts of economic devastation, as none of the promised benefits other than said cheap trinkets materialized. None of the countries that "change by trade" ("Wandel durch Handel") targeted became democratic, and instead of "trickle down of wealth" we got a "trickle down of shit and exploitation" [1] while the elites at the top got ever richer and richer. [1] https://www.allaboutlean.com/hoshin-kanri-3/bird-shit-hierarchy/ https://www.allaboutlean.com/hoshin-kanri-3/bird-shit-hierar...
    • arcticbull 3y ago
      > So what, nothing prohibits the US and Europe from raising tariffs on industrial products. I mean, there's retaliation. Trade is mutual.
    • astrange 3y ago
      Tariffs, which are just a regressive tax increase on car consumers, are a very bad industrial policy. You want to do export promotion instead.
      • mschuster91 3y ago
        > You want to do export promotion instead. That's what us Germans did, and look where it brought us to: our car companies make a significant chunk of their profit in China - Deka estimates the Chinese share of BMW profits at ~40% [1], for VW all I could find is that 41% of their exports go to China, for Mercedes it's 37%. Now the Chinese government is massively subsidizing domestic electric vehicles, and our car companies are headed for very dark times. [1] https://www.handelsblatt.com/unternehmen/industrie/autohersteller-china-deal-beschert-bmw-rekordgewinn/29116782.html https://www.handelsblatt.com/unternehmen/industrie/autoherst... [2] https://www.manager-magazin.de/unternehmen/autoindustrie/volkswagen-ohne-china-nicht-mehr-vorstellbar-rekordanteil-des-asiengeschaefts-a-9e3a722c-42f4-46d3-9f9e-3b1599e8c9ea https://www.manager-magazin.de/unternehmen/autoindustrie/vol... [3] https://www.inrlp.de/ratgeber/fahren/mercedes-benz-china-autoindustrie-markt-absatzzahlen-vw-audi-automesse-shanghai-art-5676218 https://www.inrlp.de/ratgeber/fahren/mercedes-benz-china-aut...
        • astrange 3y ago
          Sounds like they made a lot of money they wouldn't have otherwise. If they're not making that in the future, that's still better than the alternative. You could always sell to the rest of Europe, but since they're in a fiscal union with you and you refuse to deficit spend, they're not very good customers.
          • mschuster91 3y ago
            The problem is the car manufacturers are massively leveraged against and now China has our economies by the balls. All the CCP needs to do is squeeze them and we're in for many years of pain as we unravel our unhealthy dependency on both China and the automotive industry.
  • vadym909 3y ago
    If it was that easy it would’ve happened already. And software engineers jobs would have moved first due to savings and low effort and low infrastructure changes required.
    • mortureb 3y ago
      40% of IT work is already outsourced and that’s a number that is rapidly growing and that’s only over a decade and a half. It doesn’t even take into account foreign employees that now just work remotely.
      • tyingq 3y ago
        Sort of. There's a lot of outsourced work. It doesn't appear to have cannibalized the onshore work in a significant way.
        • mortureb 3y ago
          Tell that to the current SE labor market though it may be unrelated.
      • MuffinFlavored 3y ago
        why does Meta pay engineers $400k when there’s somebody offshore willing to do it for $35/hr? hmm…
        • mortureb 3y ago
          For a long time the answer was they needed those people to physically come into the office.
  • tyingq 3y ago
    It's interesting to see workgroups that are harder to outsource, and the kind of contract renewals they are getting. Like airline pilots, for example...and not just forward pay increases, but retroactive pay raises for 2+ years as a lump sum, and many other perks and changes to work rules, higher reimbursement for various things, etc.
  • fabianhjr 3y ago
    China has been averaging a 9% wage increase yoy or about 41% per 4 years. This wouldn't be news in China instead it would be the average case. https://www.statista.com/statistics/743563/china-average-yearly-wage-growth/ https://www.statista.com/statistics/743563/china-average-yea... https://www.china-briefing.com/news/average-salaries-in-china-trends-and-implications-for-businesses/ https://www.china-briefing.com/news/average-salaries-in-chin...
  • astrange 3y ago
    US market car manufacturing isn't in India/China because of NAFTA. And because cars are big and heavy, of course.
    • mortureb 3y ago
      Mexico it is then.
    • AmVess 3y ago
      Buick Enclave and Lincoln Nautilus are two Chinese made cars in the US. Expect US car manufacturers to have the bulk of their product lines to be made and designed in China before too long.
      • mortureb 3y ago
        Some Jaguars and Land Rovers are made in India and are available in the US.
• cplusplusfellow 3y ago
  Whereabouts should we purchase land in Mexico? Needs to be near the new factories that'll go in next year.
  • supertrope 3y ago
    Companies and individuals do not make decisions based on posturing or their pet peeves. If a company has not outsourced a plant already for cost savings there are reasons for still keeping that operation in the US.
    • cplusplusfellow 3y ago
      Are you aware of the cost implications that may exist by them keeping the plants here? Maybe that article linked would help you understand the structural cost implications that are proposed.
    • bagels 3y ago
      If labor costs go up 40%, but only in the US factories, I don't see how that doesn't lead to more parts & assembly in Mexico, Canada, China, etc.
      • supertrope 3y ago
        The corporate counter-offer is 20%. Clearly they’re fine still employing a US workforce with double digit employment cost inflation - over four years.
        • cplusplusfellow 3y ago
          It's beyond wishful thinking to assume that 46% increase will not motivate Ford to seek cost savings by moving factories offshore. The motivation:action tuple in this regard has been established for decades.
• readthenotes1 3y ago
  It's not unreasonable unless you feel the C-suite are simply parasites trying to leech as much out of the system as it can stand
• endisneigh 3y ago
  40% over 4 years isn't as crazy (especially when you consider that they had some concessions back in '08). typical clickbait when you consider this is a high value for negotiation and they're likely looking for anywhere between 20-30% over 4 years when it's all said and done. barely above inflation YoY.
  • dmitrygr 3y ago
    > they're likely looking for anywhere between 20-30% over 4 years when it's all said and done. TFA conveniently points out to you that 20% has been offered to them and was rejected.
    • endisneigh 3y ago
      TFA conveniently points out that the average offer between the three automakers is less than 20-30% :), and 20% is the low-end of 20-30% btw
    • l33t7332273 3y ago
      Good. As it should be. Record profits deserve record contracts.
      • wang_li 3y ago
        Only if the contracts automatically follow profits. Profits are not a ratchet, while contracts typically are. Also they are asking for more than pay raises and shortened work week. They're also demanding health benefits for retirees and defined benefit pensions among other things.
        • mplewis 3y ago
          All of these things are good for workers, their quality of life, and the quality of their work, and American workers deserve those things.
          • 3y ago
• jonathankoren 3y ago
  It’s important to note the workers made huge concessions in 2008 that saved the companies from bankruptcy. Over the years they’ve seen stagnant wage growth, while the execs got solid gold toilets. Even with 40% increase (inevitably spread out over many years), theyd barely be back to where the would have been without the concessions.
  • sokoloff 3y ago
    Arguably, without the 2008 concessions, they'd be out of a job entirely.
    • thriftwy 3y ago
      Or maybe they would already be employed at a better place paying more and using their labor with greater leverage. I believe that workers and non-CS engineers are horribly underpaid around the world. They are underpaid in the US's Aerospace, they are underpaid in Russia's military industrial complex and they are also underpaid in China which actually supplies the stuff that everybody uses. Don't doubt they are also underpaid in Japan and Korea.
      • jonathankoren 3y ago
        >Or maybe they would already be employed at a better place paying more and using their labor with greater leverage. I mean this in all seriousness. What in the past 50 years of deindustrialization makes you think that that as even a possibility? Sure, it’s the Econ 101 textbook answer. “Creative destruction” and all that jazz. But in reality, how has that actually played out?
    • nerdponx 3y ago
      All the more reason why they ought to get a little back at this point.
    • TheCoelacanth 3y ago
      And the shareholders would be out of their investment.
• econperplexed 3y ago
  > From 1978 to 2021, CEO pay grew by 1,460%, adjusted for inflation, versus just 18.1% for the typical worker. Why has the supply of CEOs not kept up with the demand for them? Surely, with the improvement in education and in increase in MBA programs, there must be far more CEOs today than in 1978. Why has the ratio of CEOs to Companies fallen by 14x for their wages to rise this much? /s As many argue, wages are only set by supply and demand. And if workers are underpaid, then it is because they are replaceable. Use the same framework to explain CEO pay.
  • kortilla 3y ago
    There is no academic training to be a good CEO. They are not easily replaceable. If they were, board members wouldn’t bother offering such high pay. Shareholders don’t appreciate wasting money.
    • hinkley 3y ago
      But if we offer more money, surely we will attract the attention of a better CEO!
      • secabeen 3y ago
        No one wants to hire a below average CEO! Our CEO needs to be Above Average, so we better pay above the median! And so the salaries spiral up and up......
    • thechao 3y ago
      They've become 14.6x more efficient at ... what? Increasing their pay? C'mon.
      • version_five 3y ago
        Like it or not, they've become more efficient at maximizing shareholder returns. 1978 to present included all sorts of financial shenanigans designed to turn a company from the old school "return on assets" model to a financial vehicle that profits on the spread between it's revenue stream and financing costs. I think it's shit too, but the job turned from running a company go making money appear, and the pay went with it. Don't hate the player, hate the game (seriously, the system is screwed up horribly)
• tysam_and 3y ago
  There is an equation with an equilibrium: CEO's pay rate = (some multiplier) * median salaried worker's pay rate OR CEO's pay rate = (some multiplier) * minimum salaried worker's pay rate We've been conditioned to think it's not fair somehow, but the discrepancy is just....engorgingly terrible. I'm not arguing for how this metric would be enforced, only that it would be a good one to have. Especially in a time when greed is the lowest common denominator in the race to the bottom for some of these large corporations. It wouldn't fix the stockholder "value" chase, but at least it would shore up one part of the system weak to corruption.
  • hinkley 3y ago
    It's also been suggested that Congressional salaries be a fixed multiple of minimum wage, and for similar reasons. Honestly I think that would probably fix things a lot faster.
    • skyyler 3y ago
      Congress already makes more money from cutting deals with their power & influence than they do from their salary...
      • amrocha 3y ago
        Yes that should be illegal too.
    • astrange 3y ago
      If you underpay elected officials then 1. they just start taking bribes 2. only rich people will run in the election. This is why Singapore pays them even more than we do. Anyway, minimum wages (despite being ok policies) aren't what people are actually paid, and of course aren't especially what non-working people are paid. And remember that non-working people, namely children and the elderly, are poorer than workers.
      • hinkley 3y ago
• throw0101b 3y ago
  Good episode of Bloomberg's Odd Lots podcast from a little while ago on the topic: > On September 14, the contract between the United Auto Workers and the Big Three carmakers (GM, Ford and Stellantis) is expiring — and the possibility of a strike is real. This comes at a delicate time for multiple reasons. The labor market is tight, which means workers have other options. Inflation is high. And the auto industry is undergoing a major shift to the electric vehicle market, which may change the composition and pay of the labor force. The stakes are high. So what does the union want and how does it fit into the goals of the broader labor market? To understand more, we speak with Dan Vicente, the director of UAW Region 9, as well as Alex Press, a labor reporter at Jacobin magazine. * https://omny.fm/shows/odd-lots/what-the-uaw-wants-from-its-fight-with-the-big-thr https://omny.fm/shows/odd-lots/what-the-uaw-wants-from-its-f... * https://www.youtube.com/watch?v=LBP8_8_S7Ls https://www.youtube.com/watch?v=LBP8_8_S7Ls There were some items that the unions conceded in 2008 when the US automakers were going bankrupt that have still have not been restored.
  • aaronbrethorst 3y ago
    Alex Press also appeared on last week's episode of the podcast Why Is This Happening, hosted by Chris Hayes. https://www.msnbc.com/msnbc-podcast/why-is-this-happening/unpacking-hot-labor-summer-alex-press-podcast-transcript-n1307158 https://www.msnbc.com/msnbc-podcast/why-is-this-happening/un...
  • jdpedrie 3y ago
    Glad to see such a range of views, all the way from labor unions to communist magazines!
• JKCalhoun 3y ago
  > “Obviously, CEOs should be the highest-paid person in an enterprise, but then the question is exactly just how much higher than everyone else,” Josh Bivens, chief economist at EPI, told NPR. I thought I read that at Japanese companies the CEO doesn't make 300 times what the workers make. Maybe the CEO made 10 times at most?
  • hinkley 3y ago
    Why should the CEO be the highest paid person in an enterprise? Why is that obvious? This foregone conclusion stuff is just notes cribbed from the aristocracy. You're not aristocrats, you're citizens.
  • astrange 3y ago
    This is true, but they also tend to get free use of things like homes and cars owned by their company.
  • umeshunni 3y ago
    https://www.japantimes.co.jp/news/2023/06/30/business/top-auto-execs-japan-paid-less-us/ https://www.japantimes.co.jp/news/2023/06/30/business/top-au... ...Akio Toyoda, was paid ¥999 million ($6.9 million) last fiscal year... "Owing to culture or corporate structure, the salaries of American executives and foreign executives in Japan have historically been much higher,” a Toyota spokesperson said Friday. "We’re aware of the gap and we’re working to fix it.” Nissan, which has just shuffled its leadership, also published salaries Friday, showing that former Chief Operation Officer Ashwani Gupta was paid ¥726 million last fiscal year. CEO Makoto Uchida made ¥673 million. Honda said last week that its CEO Toshihiro Mibe was paid ¥348 million and Chairman Seiji Kuraishi got ¥138 million.
  • ElevenLathe 3y ago
    I'm not sure why it's obvious that the CEO should be the highest paid? Why should everybody's boss make more than them? I know that isn't the case for many line managers of highly-paid programmers, for example, and I assume the same is true of other similar professions, at least sometimes. Wages are theoretically a market, and probably it's often easier to replace a skilled manager/business bro than it is a skilled engineer/artist/salesman, and often it's more important to your business.
• bradleyjg 3y ago
  I think they should get it and it should be in out of the money stock options. I don’t understand why so many dinosaur companies restrict equity based comp to the C suite.
  • toomuchtodo 3y ago
    Profit sharing is common, especially amongst employee owned companies. Base wages are behind inflation and cost of living, so of course it needs to catch up to the current macro. Fast food worker minimum wage is now $20/hr in California, for example, and healthcare worker minimum wage will be $25/hr (SB525). https://news.ycombinator.com/item?id=37558256 https://news.ycombinator.com/item?id=37558256
  • callalex 3y ago
    It’s generally a bad deal for the worker compared to cash. An assembly line worker has absolutely zero say in the direction of the company, their work will never meaningfully move the needle on stock price, so it makes no sense to tie their income to something they have no control over.
    • astrange 3y ago
      Share-based compensation can be good if the stock is heading up, because it's cheaper for the company to pay it than cash is. In between the award and vesting, the increase is paid for by equity investors. But, you have to keep working there and you have to be able to afford to wait for the vesting.
    • MuffinFlavored 3y ago
      why is it working for Tesla line workers?
      • TheHappyOddish 3y ago
        The GP clearly stated it's "generally" a bad idea. This implies that sometimes it is a good idea. Equity based payment will attract a different risk profiled group than salary will.
• andrewstuart 3y ago
  Hard to argue against.
• ARandomerDude 3y ago
  Next year’s headline: Auto Makers Hike Prices 40%, Leaving Buyers Stranded
  • astrange 3y ago
    Does it work the other way round?
  • chiefalchemist 3y ago
    Next year's other headline: More industries seeing more interest in unionizing.
  • clipsy 3y ago
    Amazing how the people who are so "concerned" that raising working class wages will result in higher prices never seem to consider that outsize executive compensation, massive stock buybacks, etc are responsible for higher prices. Almost like they aren't concerned with the prices at all!
    • ARandomerDude 3y ago
      I actually never made any of those claims. My general take is that companies who are in dominant market position will use basically any excuse to raise prices, including the ones you listed.
    • astrange 3y ago
      They accidentally have a point there though. 1. poorer people spend a much higher % of their income, whereas rich people save it. 2. there's a lot more poorer people than rich people, which unfortunately can mean they're more capable of moving prices. This is sort of related to why the middle class thinks full employment+low inequality economy is worse. There's other middle class people to bid up prices, and service at restaurants is worse/more expensive. It's nice to be in a high-unemployment high-inequality economy, if you're employed.
    • lr4444lr 3y ago
      How much is executive comp really at a publicly traded company as a percentage of revenue? 40% raises for most employees across the board probably dwarfs it. I don't see how stock buybacks relate more directly to anything here than retained earnings, or other kinds of reinvestment. They're just an effect of market conditions and the stock price.
• Waterluvian 3y ago
  I hope they succeed. CEOs are often overpaid by a lot. If I had as regular access to the books and the board of directors as C-levels do, I bet I could be paid a lot more too.
• mempko 3y ago
  This is great, I hope they get it. The wave of unionization in this country is a good thing over the long term.
• SeanAnderson 3y ago
  I've heard a counter-argument to this before and I'm curious to get other's take on it. Basically, the story goes that when an individual rises into a significant leadership position at a large enough company that the economic calculations become different. There's still an element of domain expertise, but, for the most part, leadership is leadership wherever you go. This implies that a leader could (potentially) move across sectors and still be effective which results in a wider pool of companies that are interested in competing for this person when contrasted to the ICs. Since some sectors are very profitable they end up "bidding up" quality leadership. The combination of this effect along with the fact there are objectively fewer CEOs than ICs results in a mismatch in salaries. I think there's an element of truth to this, but probably not to the extent that it justifies the widening pay gaps everywhere?
  • vasco 3y ago
    It's more likely that it is the only role that tends to be in the room when the board is deciding salaries. Turns out it's great to be able to decide how much your own compensation should be.
  • fallingfrog 3y ago
    I’d like to see one of these guys use their magic leadership mojo to lead a platoon of marines into battle. I think he’d find that domain knowledge does, in fact, matter. To the extent that it truly doesn’t matter, the ceo is a glorified mascot.
  • elcritch 3y ago
    Though this argument falls apart with evidence that CEOs of big firms do need to deeply understand their companies domain. It may work to a degree, but doesn’t seem to coincide with the most valuable companies. It’s why when Intel was floundering a few years back they got rid of CEO and brought on a CEO with deep engineering expertise. Tim Cook is a wizard of supply chain, and in many ways that’s a large part of Apples current success, IMHO. The list goes on.
    • gruez 3y ago
• 71a54xd 3y ago
  This kind of logic doesn't help anyone - yes, CEO pay is insane but its that way because of how much risk they take ownership of and shoulder day in day out. If one line worker forgets to tie a wire-harness it's not like the entire company will end up in financial ruin... However, the CEO making serious mistakes can and has cost GM millions.
  • hinkley 3y ago
    Do they take ownership though? That hasn't been that way in a while. Used to be the best warrior had skin in the game. We have them resources so when the lions came or the boars got into the crops, they were ready to kick some ass, even if the rest of us were undernourished due to a drought. Now they just "take full responsibility" where that just means they have to announce that something dumb happened on camera. Truly a gruesome fate. So brave.
  • jezzamon 3y ago
    That's why the pay rates are different, but that doesn't explain why the pay rates should increase by different percentages
  • dymk 3y ago
    A failed CEO of a large company almost never ends up bankrupt, and they almost always remain a multi-millionaire. What exactly is the risk they're taking on?
  • fallingfrog 3y ago
    Yeah but these guys typically fail upwards such that they are immune to failure, and take almost no personal risk at all.
  • yunohn 3y ago
    > CEO making serious mistakes can and has cost GM millions So despite GM paying the CEO millions, they couldn’t prevent him from making mistakes?
  • NicuCalcea 3y ago
    CEOs make mistakes all the time and often face few consequences. We should all be lucky enough to have the chance to earn in a few months what we'd normally make in a lifetime. I'll gladly accept the extra risk that goes with that.
• la64710 3y ago
  They are going for at least relative parity if not absolute parity.
• cratermoon 3y ago
  How about this compromise: cut the CEO's pay by 40% and give an 80% raise to the workers.
  • MuffinFlavored 3y ago
    her pay was $29m 40% is $11.6m there’s 160,000 employees $72.50 a year per employee a $1/hr raise for a full time employee is $2,080/year they makes $17/hr and UPS makes $21/hr on the low end part time wise lots of employees want at least $8k/yr raise ($4/hr on the low) a bit different from $72.50
    • cratermoon 3y ago
      I didn't say "take 40% of the CEO's pay and divide it up among the workers", I said, "take 40% of the CEOs pay AND give the workers an 80% raise". Take $11.6m from the CEO. Give the $17/hr worker at $13.60/hr raise. Give the $21/hr worker a $16.80 raise. Both.
• lazzlazzlazz 3y ago
  I don't follow why workers' pay should increase at the same rate as their CEOs' pay. They're subject to entirely different labor markets with accompanying risks, opportunity costs, supply, demand, cost of replacement, etc.
  • nerdponx 3y ago
    "Should" is a loaded word here. Market equilibrium is not always the best thing for society as a whole, morally or practically.
    • lazzlazzlazz 3y ago
      I agree — but deliberately breaking the market equilibrium almost always seems to be hysterically worse!
• nine_zeros 3y ago
  Why not have a law that C-suite compensation can only increase as much percentage as the lowest increase in the company?
• Alupis 3y ago
  Settle in for a wild propaganda-filled fall season. Between UAW Strike, SWG Strike, barely avoided UPS Strike, and probably a few I'm leaving out, we're going to be inundated with half truths, misdirection, selective statistics and even the occasional outright lie. UAW opening demand isn't just a 40% pay hike - but also a four day workweek (when combined is ~70% increase in pay). Nobody expects for UAW to get everything they demand (that's not how negotiations work of course) but still, it's a particularly unreasonable starting position and is likely demonstrating just how far apart both parties are. It's become a sort of meme to bag on C-Suite salaries - with a lot of folks fundamentally believing C-Suiters don't earn their pay or at the very least don't earn the extreme pay gap between them an your average line worker. Anyone thinking a C-Suiter clocks out at 5pm and doesn't work after hours has no experience in the C-Suite (or even upper management for the matter). There isn't really a such thing as "off hours" for these folks on average. Correspondingly, decisions made by your C-Suite can earn a company huge returns, or doom the company and all of it's employees and stake holders. Comparing C-Suite compensation, pay scale, growth rate and disparity from line workers is disingenuous at best. They cannot be compared, nor should they.
  • aaomidi 3y ago
    4 day work week has been successful in most places. As a world we should move towards it. Other benefit: less environmental impact, more time for people to improve themselves and their mental health, etc.
    • Alupis 3y ago
      Successful or not is not the point. If met with the 40% pay increase it's another huge pay raise. There is no reality where line workers screwing in the same 3 door bolts all day long are getting what amounts to an effective ~70% pay increase. Additionally, the 4 day work week is yet unproven in an industrial setting, such as are UAW member's jobs.
      • AlotOfReading 3y ago
        That 40% is amortized over 4 years, which is ~9.8% annually. Where are you getting the rest of the 70% from?
• meindnoch 3y ago
  "Obviously, CEOs should be the highest-paid person in an enterprise" Hold on there chap! How is this obvious?
  • lr4444lr 3y ago
    They have the highest accountability.
    • galleywest200 3y ago
      But do they do the most for the company, though? What about those who actually invent their products in R&D, or any of that?
      • TheHappyOddish 3y ago
        I've yet to come across a company that pays the highest output individuals the most. That's not how capitalism works.
    • lowbloodsugar 3y ago
      Not really true. They have the most people beneath them that can take the fall for them. Finance shenanigans? CFO takes the fall. Missed targets? COO or CMO. Major hack? CTO. Etc.
    • kccqzy 3y ago
      These people with the highest accountability do not hesitate to blame lowly software engineers when it suits them. https://www.theverge.com/2015/10/8/9481651/volkswagen-congressional-hearing-diesel-scandal-fault https://www.theverge.com/2015/10/8/9481651/volkswagen-congre...
    • meindnoch 3y ago
      But isn't compensation proportional to the cost of replacing someone? I can imagine a bunch of roles that are more costly to replace than "someone with accountability".
    • 3y ago
• nemo44x 3y ago
  Why does LeBron James make so much more than the ball boy and concession stand workers and ushers? A CEO that delivers alpha deserves a big cut of that. The board exists to hire leaders that can deliver alpha. A good deal fail to. But the ones that do are more than worth their compensation. And btw you have 0 chance of attracting the kind of CEO that can deliver alpha by offering peanuts. It doesn’t always work out and there’s plenty of snake oil CEOs, but the good and great ones are worth every cent to stock holders.
  • ken47 3y ago
    My understanding is that the CEO's in question are not even remotely comparable to Lebron James's stature in basketball.
    • nemo44x 3y ago
      Then your understanding is misinformed I’m sorry to report. CEOs are generally top level business people and most business people can’t play at their level. There are exceptions but the system cycles poor performers out much like the NBA does to high draft picks that have lower than replacement value. Businesses compete against each other and the CEO orchestrates the strategy and is accountable for the the execution across a broad spectrum of functions. There is a power law distribution where the very best CEOs are vastly superior to the good who are to the replacement level ones. So like in the NBA you may overpay for a guy in the hopes they are great or you pay handsomely for a good player that is above replacement level or you pay the highest for the best to run your company. Sometimes it pays off and sometimes not. But the value that great CEOs produce is astronomical. Well more than a basketball player could ever hope to produce.
      • ken47 3y ago
        The problem is that so many people are "CEO" nowadays. Anyone can become a CEO tomorrow by registering a corporation for a few thousand dollars or less. The businesses that produce great value, and may reflect well on their CEO's abilities, are in the minority.
• MuffinFlavored 3y ago
  The only person losing out is going to be the consumer. What's to stop executives at Ford, GM and Stellantis from saying "sure, 40% pay increases, no problem" and then just passing it along to consumers one way or another? There isn't enough margin in the R&D + logistics of producing cars as is. Ford's stock is up 25% in 5 years, vastly underperforming the index GM stock is -5.6% over 5 years Stellantis stock is +3.55% over 5 years. Where is the argument that the greedy capitalist meanies at the top are doing nothing but buybacks with the millions in profits inflation the stock?
  • massysett 3y ago
    “and then just passing it along to consumers one way or another?” The consumer will buy a car from a non-union automaker that charges less.
  • mulmen 3y ago
    Ford jumpstarted the middle class by increasing compensation to a level that created more customers. This is consistent with the idea that value is created.
• pyrophane 3y ago
  Well, if interest rates remain high, perhaps CEO pay will go down.
• abeppu 3y ago
  Just to point out a demonstrated, viable, successful reality achieved under different values and assumptions, the Mondragon Corporation/cooperative produces car parts, among many other things, and has pre-agreed ratios for wages for executives relative to the lowest wages paid to workers, and this tops out at 9:1. Studies have found that worker-owned coops have a greater survival rate than conventional businesses, and that they have higher productivity. https://en.wikipedia.org/wiki/Mondragon_Corporation#Wage_regulation https://en.wikipedia.org/wiki/Mondragon_Corporation#Wage_reg... https://en.wikipedia.org/wiki/Worker_cooperative#Longevity_and_resilience https://en.wikipedia.org/wiki/Worker_cooperative#Longevity_a...
  • reddozen 3y ago
    Mondragon is not a worker cooperative. They have a three-tiered worked system[0] with clear hierarchical structures and differences in voting power. The temporary worker tier (largest) having no voting power whatsoever. [0] https://www.researchgate.net/publication/290978631_The_Mondragon_Co-operatives_and_Global_Capitalism_A_Critical_Analysis https://www.researchgate.net/publication/290978631_The_Mondr...
    • thelastgallon 3y ago
      "cooperatives don't have to treat everyone exactly the same. You can have different "classes" of members. some ideas about how to offer "founder incentives" in workers cooperatives." From a recent HN comment: https://news.ycombinator.com/item?id=37304911 https://news.ycombinator.com/item?id=37304911
      • reddozen 3y ago
        If you want to come up with a different word sure, I would just call whatever you defined there as traditional a corporation. But worker cooperatives is known as "one worker, one vote" and anarcho syndicalists like Richard Wolff wouldn't consider that a worker cooperative anymore.
        • 3y ago
• ftxbro 3y ago
  imagine a line worker comparing themselves to a ceo. tim gurner is right the workers really are becoming arrogant
  • Exoristos 3y ago
    The word you're looking for is "uppity." "Arrogant" is the CEO assuming he's worth hundreds of times more than a different man.
    • ftxbro 3y ago
      at least in usa the word uppity has some other connotations. also i was quoting that guy as saying arrogant so i guess he was the one looking for the other word not me
      • tbrownaw 3y ago
        Yes, those other connotations would be what the other poster is accusing you of secretly thinking.
• hindsightbias 3y ago
  IDK about the current guy, but the CEOs who moved production to Mexico will be seen as deserving every penny. On a per-unit cost, what’s labor vs CEO?
• DueDilligence 3y ago
  [dead]
• vondur 3y ago
  I totally agree that CEO pay is out of control for the most part, but I doubt the companies can really afford to give such a huge raise to thousands of employees. I think in the 1950's US, the average CEO's salary was "only" around 5-10x that of the average workers rates. This meant while CEO's were wealthy, they weren't Uber-wealthy like they are today with 100x salaries vs. average worker pay.
• skymast 3y ago
  [dead]
• refurb 3y ago
  The average CEO at a top U.S. company was paid $27.8 million in 2021, including stock awards — 399 times as much as the typical worker — according to research published by EPI. From 1978 to 2021, CEO pay grew by 1,460%, adjusted for inflation, versus just 18.1% for the typical worker. Auto workers aside, this is always a crappy stat that is thrown about. "Top US companies" is rife with survivorship bias. It's like saying "the CEOs of the most successful companies had their pay increase..." Well yeah, when a company is successful, compensation rises. Average CEO pay across all companies in the US is like $250,000. Honestly, if the union wants similar compensation as the CEO, they should have the same pay structure as the CEO - 10% in cash salary and 90% in options or stock. When the car company does really well, they make a ton of money, when it does poorly, they make almost nothing. But I would guess they wouldn't go for that.
  • mulmen 3y ago
    > Well yeah, when a company is successful, compensation rises. Only for the C-suite apparently. > When the car company does really well, they make a ton of money, when it does poorly, they make almost nothing. That’s already how it works. Workers took pay cuts in 2008 to keep the companies going. It worked and now the UAW is asking for the same pay recovery that the C-suite already received.
    • refurb 3y ago
      > Only for the C-suite apparently. Seems like you missed the point entirely, but ok. But anyways, that's false, US autoworkers have a profit sharing component to compensation. https://www.freep.com/story/money/cars/general-motors/2023/01/31/gm-uaw-profit-sharing-checks/69853383007/ https://www.freep.com/story/money/cars/general-motors/2023/0... > That’s already how it works. Workers took pay cuts in 2008 to keep the companies going. It worked and now the UAW is asking for the same pay recovery that the C-suite already received. Workers did not take pay cuts in 2008, the autoworker unions actually created a multi-tier compensation structure that protected existing union workers (surprise!) and penalized all the new hires. And CEO compensation, at least at GM dropped by ~80% after the 2008 crash. https://www.reuters.com/article/us-gm-compensation-idUSTRE73K5SD20110421 https://www.reuters.com/article/us-gm-compensation-idUSTRE73...
• lostlogin 3y ago
  > “Obviously, CEOs should be the highest-paid person in an enterprise, but then the question is exactly just how much higher than everyone else,” Josh Bivens, chief economist at EPI, told NPR. Are there any examples where this isn’t true? I know someone who works as an engineer cleaning up nuclear waste. The workers who do the job he engineers are paid more than him. He is ok with that but did pass the comment that it’s an unusual situation.
  • marricks 3y ago
    "Of course they should be paid more, cause they are." I think NPR does a lot of damage not questioning assumptions like this. Or, often times, putting them out there themselves.
  • chadash 3y ago
    The football coach is often the highest paid employee at the university. I wouldn’t be surprised if many rockstar doctors made more than some of their hospital CEOs.
  • wincy 3y ago
    I’d imagine Linus Sebastian (of YouTube Linus Tech Tips fame) is taking home more money than the recently appointed CEO of the Linus Media Group. But that’s also a weird situation because he basically hired the CEO to free himself up to do the parts of the job he likes. He said someone offered to buy the company for $60M cash I think it was? Which is astounding.
    • belltaco 3y ago
      He and his wife own 100% the company so it might be better to hold on to the cash for tax purposes than pay themselves a lot because tax on payroll is pretty high compared to company's cash sitting in the bank. I think the offer he mentioned was $100M for LTT.
  • lz400 3y ago
    In banks and financial companies it's relatively common that some rock star trader or quant that has an exceptionally good year might make more than the CEO.
• vaadu 3y ago
  Robot makers and overseas workers are all in supporting this strike.
• screye 3y ago
  I have to wonder. What percent of Tesla's success is attributable to not having legacy union baggage. Unions are the tech debt of the manufacturing world. It starts with a good idea, but if you let it fester, then it quickly becomes more of a drag than a productive addition to your organization.
  • mortureb 3y ago
    It’s a balance. Tesla employees are not having a good time, I can tell you from first hand experience. You’ll make reasonable money but it’s not really a life worth living with 12 hour days and extreme stress. Atleast the options made me rich so maybe it was worth it?
    • MuffinFlavored 3y ago
      what’s something Elon has done better/differently than the GM CEO?
      • mortureb 3y ago
        Having a product people desire and doing at excellent job of marketing without actually spending marketing dollars. But this was back when I was there and Elon wasn’t crazy and actually adored.
  • mulmen 3y ago
    Unions don’t serve the company. They serve the workers. The real irony here is that Henry Ford jumpstarted the middle class by increasing pay to match increased productivity. That new middle class then bought his cars. A company that doesn’t serve workers and thus society has no right to exist.
• bagels 3y ago
  People get really fixated on CEO pay. Its only of symbolic importance. Google says: 167,000 GM employees Mary Barra salary: $29M Distribute that salary across the whole workforce: $174 per employee They should really be talking about it in terms of inflation or profit margin. GM profit for 2022 was $21B
  • pests 3y ago
    I always see people show this equation and it never made sense to me. No one is saying the CEO is taking money the employees would have otherwise earned. When you divide it out like that of course its a pittance per employee. The statement is about the relative scale of the CEO pay to one employee. I don't care about the difference applied to all employees. An absurd parody I always imagine: John is 7ft tall. His group of 6 other other friends are only 6ft tall. Wow John is really tall! Nah, if you distribute his tallness between his friends they would only gain 2 inches! That has nothing to do with John being 12inches taller than any one of them.
    • bagels 3y ago
      It frequently doesn't matter how much the CEO makes. It's not why the other employees aren't making more money. It's just a distraction. It boils down to "it's not fair". If what is important is the ratio between CEO pay and employee pay, then the board can cut CEO pay, and call it a day. That doesn't improve employee pay. If the employees really only care about that ratio, then they should accept that outcome from their strike. That's not why they are on strike, they also want to be paid more, just like the CEO.
      • nebulousthree 3y ago
        This is some of the most disingenuous crap I've read in a while. Flip it on its head: "If c-suite really only cares about $ spent on labor, they would accept the productivity outcome of their salary proposals to employees. But they don't. They want to get more productivity, just like the workers of [insert competing corp], while not changing or even reducing comp." The reason your comment is disingenuous is that it assumes that the best place for this money to go is into c-suite/board pockets, and for some reason assumes that workers wouldn't take the couple extra grand the CEO pay split would give them. I challenge any CEO to put it up to a (non-binding, don't shit yourself) company-wide vote. But let's disregard the salary split. It is an incredibly simple-minded way of approaching what to do with millions/year. Are all of you, who justify these ridiculous ratios, truly unable to think of ways to spend dozens of millions of dollars to improve all employees' qualities of life? Those who spend all this money on consultants to figure out how to squeeze an extra penny of profits can't figure out how to further optimize the health of the workforce instead? Cue the comments about "no choice, fiduciary duty". Makes me sick.
• imchillyb 3y ago
  Value of a cog, gear, or screw is minimal. Value of a complete and functional engine is much greater than the former. A complete and functional automobile’s value is, most times, greater than cogs, gears, or engines. An employee’s value is relative to a gear, cog, or assembly of them. A CEO is akin to an engine, infinitely more valuable, a requirement for functionality, is the force behind a company’s goals and provides locomotion. The automobile itself is the company. While an auto may function without gears and assemblies the performance will be sub optimal. An auto functioning without an engine is said to be coasting. A company without a CEO is also coasting. The value is supposed to be performative. A great CEO provides direct value, direct movement, and is rewarded thus.
• AndrewKemendo 3y ago
  This is great. Add this to SAG-AFTRA, Waffle House workers and Starbucks walkouts and we have real movement toward a general strike If both Wal-Mart and Amazon drivers strike we might actually have a shot a taking a bite out of capital finally.
  • MuffinFlavored 3y ago
    serious question: say everyone you described gets a 20% raise what do you think will happen to the cost of goods? what companies do you think are operating with enough margin that they can just afford a 20% rise in their payroll costs?
    • amrocha 3y ago
      Serious question: if every company was working with razor thin margins, and every worker made make minimum wage while investors reap profits from speculation, would that be good?
      • MuffinFlavored 3y ago
        in the case of the GM stock particularly, is their profit that could/should be redistributed to workers (they had $10b in profit last year): yes in the case of the GM stock particularly, are shareholders/investors reaping profits and benefit? go look up the GM stock, it's flat/down over 5 years
        • OkayPhysicist 3y ago
          > in the case of the GM stock particularly, are shareholders/investors reaping profits and benefit? go look up the GM stock, it's flat/down over 5 years You failed to take into account that GM issues real stock (unlike most tech companies) and thus pays dividends. If you take dividend payouts into account, the value of an investment in GM has been indisputably positive (though probably not more positive than inflation).
    • AndrewKemendo 3y ago
• pc_edwin 3y ago
  I remember getting downvoted then flagged for making a reasonable argument against a bunch of employees from Tesla unionising. While its not exactly a vindication, I feel super vindicated right now and I'm not gonna be reasonable this time. These companies have no way out, they are going to die! All these people will lose their livelihood and worse their options to monetise their skillset/experience will be next to zero. Is this your utopia?! I've been researching Ford for a while, they have so much debt and an extremely small margin for error for the EV transition. It was gonna be so tight and now their fate is sealed. I'm not proud of this but a part of me find a bit of joy in what comes next. There is this Thanos side of me that feels like a grave injustice have been done here. These people have no right to have this much power over a company. You really think a CEO isn't worth 300-400x more than a line worker? Honestly I can't fathom that level of ignorance/cognitive-dissonance. Replace CEO with any sort of leadership role in any kind of organisation/entity with skin in the game (where outcomes can hurt). Whether if its football coaches, generals, head of state etc. I know nobody (sane) disputes the difference between a c-suite employee vs a line worker but what I'm talking about is the exponential nature. These people are barely human. Imagine the stakes, the leverage, the consequences and the sheer amount of context you need. Being in the top percentile of IQ, EQ, competence, industriousness etc are just tablestakes. You need to be ruthless while at the same time have an immense capacity for empathy. You need to be extremely conscientious/industrious while at the same time having a large reservoir of creativity. Its like the infinity stones, you can't just be a galaxy brain or just have the gift of the gab or be a psycopath. You need it all and more while competing against people just like you for rarified roles. To top it off, all of this just gets you into the ring, you also need to actually win and win consistently over period of time. Usually this requires sacrificing your entire life. Btw this where the barely human part comes in, these people thrive on this. All these CEOs have enough money to retire on a beautiful ranch or oceanfront mansion, instead they work 70 hour weeks. And you think these people are somewhat similar to the guy who screws in car parts? You think society should value these people in somewhat the same realm? like a linear nature (50% or 300% more). This kind of thinking is what leads to the end of civilisations. These people should be revered. We should be grateful. I still can't accept there are people in the world who think its somewhat similar. This is not an IQ thing, its not even a being well read thing.. This is common sense. We all have met people in our lives where we go "oh there are level to this game", like freaks of nature. How can you not think its the same for you know, leading a multi billion dollar public corporation with hundreds of thousands of employees.. Its mind boggling. How can people no see the asymmetry!
• mullingitover 3y ago
  I'm surprised unions don't throw their weight around more via equity ownership in the company. Controlling the company directly is really the endgame move, once they control a majority stake, they're literally just negotiating with themselves for their labor contracts. Even better, if they're managing their pensions via investment houses, why not just build their own investment house and leverage their negotiating position that way?
  • mr_toad 3y ago
    If they could afford that they wouldn’t need jobs. They’d need to hire a bunch of new workers. It would be interesting to see what happened when the shoe was on the other foot.
    • mullingitover 3y ago
      I'm surprised, I did a little digging and there are actually quite a few companies that are at least 50% employee owned[1]. The biggest company in the list is Publix Supermarkets, but there are also quite a few manufacturing and engineering firms. [1] https://www.nceo.org/articles/employee-ownership-100 https://www.nceo.org/articles/employee-ownership-100
  • gen220 3y ago
    I always thought the same. Bargaining for some minimum amount of cash is important (food on the table, gas in the car, etc.). But beyond that, meaningful equity in the hands of labor should surely be the goal — it aligns interest in a way that cash can’t.
  • ryathal 3y ago
    US unions are notoriously anticorporate, they generally despise the idea of stock based compensation.
• seanmcdirmid 3y ago
  Just wondering, but are any of the American car companies doing well besides Tesla? Every year they seem more irrelevant, even Texans will buy Japanese pickup trucks these days. I just don’t see them rich enough to pay their CEO or workers 40% raises, and that increase is just going to be temporary as their business become less viable and layoffs or insolvency follows.
  • bufferoverflow 3y ago
    Best-selling cars in the US are • Ford F-series(F-150 being the most popular car in the US) • Chevy Silverado • RAM Pickup • Tesla Model Y • Toyota Rav4 • Honda CRV • Toyota Camry • GMC Sierra • Nissan Rogue • Jeep Grand Cherokee So 6 out of 10 are American.
    • apexalpha 3y ago
      Okay but that's in a protected market with high entry barriers and import tariffs for foreign competitors. What's the list globally?
    • seanmcdirmid 3y ago
      So 4 pickups? At least pickups are high margin now (they used to be cheaper than cars when I was a kid). I guess American non-Tesla cars still are popular in places like Texas then?