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Japanese companies did not do very well over the last 20 years (by pretty much any metric) so objectively US executives as a group did significantly better than

Japanese companies did not do very well over the last 20 years (by pretty much any metric) so objectively US executives as a group did significantly better than Japanese executives as a group. In addition you can't talk only CEO salaries without mentioning that salaries in US are overall much higher than in Japan. 13M salary for somebody managing 305k employees sounds very reasonable when senior manager/director (manages 50 people) at tech company makes 1M+.

femiagbabiaka 3y ago
Assigning macroeconomic trends to the actions of CEOs seems off. A really good CEO (if that exists) can not fight decades of terrible macro.
bumby 3y ago
Compare it to the past US CEO pay then. In the heyday of the American economic boom of the 1960s, the CEO-to-worker pay gap was an order of magnitude lower. What's a bit odd to me is how the social norms have shifted regarding this, to the point where average Americans defend it as just.
- Shaanie 3y ago
  Did you adjust for company size? I bet the average s&p 500 company is much larger than they were in the 60s. Doesn't seem strange or unjust to me that a ceo of a $1 trillion market cap company can demand higher pay than one for a $1 billion company.
  - derstander 3y ago
    > Did you adjust for company size? I bet the average s&p 500 company is much larger than they were in the 60s. If you adjust for company size then you should adjust for inflation as well. I’d be interested in knowing for sure, but if I had to, I’d guess they’re 5-10x, not 1000x, bigger.
  - bumby 3y ago
    As another commenter mentioned, there’s a lot that goes into market cap. The adjusted PE is quite a bit higher than the 1960s, implying the market caps are overvalued by comparison, so I’m not sure market cap is a great proxy. One other way to measure it is by worker productivity, which has also increased since the 1960s. Somehow those productivity gains are disproportionately hoovered up by management.

femiagbabiaka 3y ago

Assigning macroeconomic trends to the actions of CEOs seems off. A really good CEO (if that exists) can not fight decades of terrible macro.

bumby 3y ago

Compare it to the past US CEO pay then. In the heyday of the American economic boom of the 1960s, the CEO-to-worker pay gap was an order of magnitude lower. What's a bit odd to me is how the social norms have shifted regarding this, to the point where average Americans defend it as just.

Shaanie 3y ago
Did you adjust for company size? I bet the average s&p 500 company is much larger than they were in the 60s. Doesn't seem strange or unjust to me that a ceo of a $1 trillion market cap company can demand higher pay than one for a $1 billion company.
- derstander 3y ago
  > Did you adjust for company size? I bet the average s&p 500 company is much larger than they were in the 60s. If you adjust for company size then you should adjust for inflation as well. I’d be interested in knowing for sure, but if I had to, I’d guess they’re 5-10x, not 1000x, bigger.
- bumby 3y ago
  As another commenter mentioned, there’s a lot that goes into market cap. The adjusted PE is quite a bit higher than the 1960s, implying the market caps are overvalued by comparison, so I’m not sure market cap is a great proxy. One other way to measure it is by worker productivity, which has also increased since the 1960s. Somehow those productivity gains are disproportionately hoovered up by management.