8 ms·

Employee – CEO pay gap historically wide

152 points by e12e 1y ago

rimbo789 1y ago
Every CEO I’ve worked for could have been replaced with a bot that randomly spat out “yes” or “no” to questions and the company would have either been improved or stayed the same.
mc32 1y ago
And it’s not only a problem at for profit organizations but also a problem for so-called NGOs and other non-profits —who you’d think would be different… Screw it, tax them progressively for every multiplier above the average Jack and Jill’s pay —with adjustments for company size and whatnot.
- Hikikomori 1y ago
  At some point do we need to make it a law to not compensate anyone more than x times the lowest worker salary?
  - ndrwdvvs 1y ago
    this would greatly diminish meta's ability to hire ai researchers
    - Analemma_ 1y ago
      I'm already sold, you don't need to sweeten the deal further.
    - michaelt 1y ago
      Their competitors like Google and OpenAI would also be subject to the same salary cap.
  - navbaker 1y ago
    That will never happen in the US as long as the current iteration of the Republican Party has any power to stop it, which is given to them by people continuing to vote against their own interests and thinking that billionaires are what “makes America great”.
    - m00x 1y ago
      The democrats are just as guilty of this. There was bi-partisan support for blocking congress from trading due to clear insider trading and the Democrats refused to support the bill. Democrats were also the ones to move all manufacturing to China, which hurt the American worker more than anything we've done in the past 20 years. If the democrats were actually serious about the working class, they would've let Bernie compete against Trump.
- wat10000 1y ago
  Never mind the multiplier. Bring back 90% marginal tax rates.
  - bpt3 1y ago
    The ones that had numerous loopholes causing the effective rate to be similar to what it is today? Sure, have at it, but it's not going to have the effect you want. If you think anyone is going to pay an effective tax rate of 90%, I'm not sure what to tell you.
    - wat10000 1y ago
      Of course they're not. In a progressive system that uses marginal rates, there's little point in giving someone a raise when they're in the 90% bracket, so nobody is going to be paying a 90% effective rate on all their income. The point isn't to actually collect $90 million in taxes from a CEO paid $100 million, the point is to discourage that kind of ridiculous pay package in the first place.
      - _DeadFred_ 1y ago
        Also the 90% was only charged on income OVER a fairly high amount. I think it was the equivalent of income over $2 million.
      - bpt3 1y ago
        In reality, the people who earn that much will do what it takes to avoid those taxes, including moving themselves or their business to someplace that won't confiscate their income if needed.
        wat10000 1y ago
        Somehow I don’t think Starbucks is going to move overseas. Anyway, most CEOs don’t own a majority share in their company. I’d like to see a CEO try to argue for a massive transformation of the company just so they can personally be paid more. Shareholders should boot them out pretty fast.
vaneri2007 1y ago
Are we back to monarchy where the few makes the most and the rest is there to watch?
- goatlover 1y ago
  Technofeudalism where our tech lords rent out all the services we rely on. AI will only make it worse.
  - glitchc 1y ago
    Why not stop renting? As experts, we are in a unique position to be able to make that choice. Regular joes and janes don't have much hope, but we do.
    - hunter-gatherer 1y ago
      You must not be from around here. Most of us here on HN are lords, vassals, or nobles in this technofeudalist society. The technomonarch is currently giving us enough fiefs to behave appropriately.
      - bee_rider 1y ago
        I’m not sure of that. I expect most of the posters here are more like the equivalent of a skilled blacksmith. I mean, it is a little weird because compensation these days usually includes stock, so, some ownership of the company. But not much real decision making power beyond the limited-scope decisions around we implement their will. Maybe a consultant could be considered like a vassal?
        glitchc 1y ago
        I think this is the right analogy. A skilled blacksmith has influence in his village, but he is still operating at the mercy of his vassal lord, and by extension, the king of the lands. Speaking up against either would find him dispossessed rather quickly.
humblebeekeeper 1y ago
Workers should exercise their power more, imo. We need more folks willing to put tools down, collectively, over stuff like: * RTO mandates that reduce productivity AND job satisfaction * High CEO pay outstripping worker pay * Loss of work autonomy and space (working without an assigned desk) * Layoffs out of the blue for successful teams * Weakening benefits * AI being wedged into whatever task you are working on I don't care if it's a union, I don't care if it's a guild, I don't care if it's just a group of folks deciding to take action together, whatever. It's time we (especially us in tech) to stop acting like "got mine" and start acting like "get ours".
- taraindara 1y ago
  The hard part is these workers are doing the job to survive life. Without the job, the unsure future is terrifying. I’m all for taking action. I just don’t know what action best suits my needs, other than finding a new job or starting my own business and hoping I don’t become one of the greedy ones too.
  - echelon 1y ago
    > The hard part is these workers are doing the job to survive life. Tech companies used to hire all the brilliant engineers because they were worried about startups eating their lunch. Without antitrust enforcement, they've grown large enough that they can essentially bleed money in any of their non-core markets for decades without it impacting them. So this clearly isn't the case anymore. We need to: (1) get the DOJ/FTC/EU/ASEAN/etc. to slap the FAANG / Mag 7 hard. Bust them up into many companies. It would probably even result in greater market value being created as these companies are inefficiently sitting on gold mountains that they do not monetize and also making insane malinvestments that simply waste millennia of human engineering in stupid ways that have absolutely no potential of succeeding. But more than anything, this oxygenates the field for competition and provides greater upside to the financial / labor / innovation capital that are actually doing the work. (2) start lots of startups that erode the key money makers of these companies. They're quite vulnerable right now. And they've laid off a lot of highly skilled labor. Google should be four or five companies, at minimum. And it's time that the governments of the world demand it.
fredfoobar 1y ago
Looks like a cash grab before the AI meltdown
Workaccount2 1y ago
The media would probably lose 20% of their revenue if people learned that CEO's with those monster pay packages get paid out of shareholders pockets, whereas workers get paid out of company pockets. To put it plainly - not paying the CEO wouldn't free up any meaningful amount of more money to pay the workers.
- vouaobrasil 1y ago
  Even if that were true, they should still get less on principle. Making the elite richer gives them even more power that they don't need.
  - bpt3 1y ago
    On what principle? Why should anyone be barred from negotiating the best deal they can get in a fair exchange?
    - vouaobrasil 1y ago
      The keyword is fair. The have the power to influence the government through bribes so it's never fair. And they can use their wealth to take advantage of the commons as well. They should be sent to prison, the majority of them.
      - bpt3 1y ago
        All that matters here is that the CEO and company are negotiating without one side being able to apply some sort of external pressure to force the other to capitulate to their demands. Unless of course you're claiming that CEOs are bribing "the government" to force companies to increase their pay, which would be quite the theory. So again, what is the principle that says CEOs should be paid less than a company is willing to pay them to work in that role? Should all workers decline to maximize their compensation, or just those you deem to have too much money? If the latter, what is the threshold?
- clipsy 1y ago
reliabilityguy 1y ago
I suspect that lack of strong antitrust contributed greatly to what we have now.
- vouaobrasil 1y ago
  That, and the government support of big business in many other ways as well.
- paulddraper 1y ago
  What trusts do you see? Apple?
  - reliabilityguy 1y ago
    Google, Meta, MSFT, Apple, and many many others. My (perhaps moronic, but hey, I’m not an expert) metric is this: if a company X constantly buys other companies just for the sake of preventing competition —- it’s bad, and we risk to have a monopoly. Which, we almost do have with Google, Apple, and many others. I mean, it’s a fine line to thread: companies should be able to do M&As, but at the same time, they should not be allowed to become monopolies.
    - adastra22 1y ago
      > Google, Meta, MSFT, Apple, and many many others. That's ... not how monopolies work.
      - reliabilityguy 1y ago
        Thank you for a very insightful comment. PS you do not have to have a monopoly to get no or minimal competition.
      - arrosenberg 1y ago
        Antitrust law covers a broad range of anti-competitive corporate behavior. Don't be pedantic.
  - 1y ago
bko 1y ago
The question is often framed as "fairness" but the more interesting question, are the high salaries worth it? One person they cite as a high salary is the Starbucks CEO. > The report listed Starbucks CEO Brian Niccol as making 6,666 times more than the company’s typical worker, the largest pay gap in the S&P 500. (Niccol took over the company’s helm last September. The AFL-CIO annualized his compensation, listing it as nearly $98 million, compared to the typical Starbucks worker’s pay of less than $15,000.) But what happened after he was announced? The stock jumped nearly 25%, resulting in an increase market cap of 27.2 billion [0]. So the $98m per year compensation is a great bargain for Starbucks and all their shareholders. This at least suggests that CEOs are very important (or investors are stupid?). But the stock price today is about the same level post announcement, so the value of his leadership mostly matched expectations for now. It would be great if the article had some of this context and nuance rather than a press release from the AFL-CIO. https://www.forbes.com/sites/petercohan/2024/08/13/why-starbucks-stock-could-more-than-double-under-new-ceo/ https://www.forbes.com/sites/petercohan/2024/08/13/why-starb...
- dvt 1y ago
  > So the $98m per year compensation is a great bargain for Starbucks and all their shareholders. And their employees, too, actually, since they have something called the Bean Stock[1] program. But citing this wouldn't fit the article's narrative. Comparing salaries of a regular employee and a CEO (especially one of a public company) is like comparing apples to oranges; it has nothing to do with fairness. The two are fundamentally different in effort, incentive, and risk:reward structure. [1] https://www.starbucksbenefits.com/en-us/home/stock-savings/bean-stock/ https://www.starbucksbenefits.com/en-us/home/stock-savings/b...
  - buerkle 1y ago
    Sorry but the risk:reward narrative is tiring. Many of these CEOs walk away with millions whether they succeed or fail, there's little to no risk for them. In fact, even they fail in cases they end finding another well paying executive position. Meanwhile, many of their employees are living paycheck to paycheck.
tschellenbach 1y ago
AI is giving people endless freedom to start their own companies if they feel their skills are undervalued elsewhere. Very positive change for the world I think.
- rimbo789 1y ago
  What a wildly naive take. AI will be another force of centralization, de-skilling, and repression that will make more people more dependant and more precarious making it much harder for them to start any form of business
shkkmo 1y ago
The edited headline "Employee – CEO pay gap historically wide" here is wrong. The Employee - CEO gap is higher (ratio 295) than last year (ratio 268) but lower than in 2021 (ratio 324). If you're gonna make up a headline, don't make up one that is factually false.
- e12e 1y ago
  Sorry about that - I tried to shrink the original to fit hn, but gave up after a few attempts. I'd argue the gap is still atypically wide, these past few years, though.
  - shkkmo 1y ago
    The gap is atypically wide, perhaps "Employee – CEO pay gap rises" would have the same intent without the factual inaccuracy?
thrance 1y ago
Boss makes a dollar, I make the third of a cent.
Kapura 1y ago
damn, if only it were possible to pass laws that make rewarding individuals increasingly unattractive as the individual rewards increased. some sort of progressive taxation scheme, perhaps. if only such a thing could exist!
- m00x 1y ago
  You can't reap the rewards from a highly free market country while also interfering with the free market. There are countries where that gap is lower where you can move to if you really care about this. Most of Europe is a lot more equal, but you'll take a significant pay cut.
  - hollywood_court 1y ago
    We do plenty of interfering with the free market. We just don't do it in ways that benefit the workers.
  - greedo 1y ago
    There's no such thing as a free market.
  - standardUser 1y ago
    Binary thinking like that is a rhetorical trick, and a lazy one, that ignores both the diversity of existing market-oriented nations and the reality that these systems are not static. Not to mention that the American system is one of constant, frequent, and oftentimes contradictory forms of market interference, even if the manner of interference differs a bit from Western norms.
  - tartoran 1y ago
    > You can't reap the rewards from a highly free market country while also interfering with the free market. Look deeper into who's reaping all the benefits and who's interefering with the market.
  - mattmanser 1y ago
    Those rewards are failing, so yes you can. Your argument is just trickle down economics dressed up. But worse, we know that doesn't work. Not, we think. WE KNOW IT DOESN'T WORK. In fact, once you realize it's just the same tired trickle down economics argument, then when you start asking why is growth stalling, why are living standards falling? You can easily answer it. Because trickle down economics don't work. Because too much value is being captured by a tiny minority, who use that capital poorly.
cyanydeez 1y ago
Wonder if they included the acquahires ditching the dead weight
Jerry2 1y ago
I'm convinvinced that CEO-employee wage gap is due to this not-so-well known legal case from 1919: Dodge v. Ford Motor Co. [1] Basically, in 1919, Henry Ford sought to reinvest the Ford Motor Company’s profits into raising employee wages and expanding hiring, arguing that sharing success with workers would strengthen the economy and the company’s long-term prospects. However, minority shareholders John and Horace Dodge (who also ran their own competing auto company) sued Ford, claiming that his actions violated the fiduciary duty to maximize profits for shareholders. The Michigan Supreme Court ruled in favor of the Dodges, declaring that a corporation’s primary obligation was to serve the financial interests of its shareholders and not broader social goals or even the well-being of its employees. This decision established a legal precedent that continues to shape corporate law even today and reinforcing the doctrine of "shareholder primacy" and limiting the ability of companies to prioritize stakeholders (like workers or communities) over investor returns. It's been downhill for employees since. [1] https://en.wikipedia.org/wiki/Dodge_v._Ford_Motor_Co https://en.wikipedia.org/wiki/Dodge_v._Ford_Motor_Co.
- deleted 1y ago
  [deleted]
- opo 1y ago
  >Basically, in 1919, Henry Ford sought to reinvest the Ford Motor Company’s profits into raising employee wages I don't actually see any reference in the wikipedia article that Ford was saying he wanted to use the dividend money to raise wages: >...Henry Ford, sought to end special dividends for shareholders in favor of massive investments in new plants that would enable Ford to dramatically increase production, and the number of people employed at his plants, while continuing to cut the costs and prices of his cars. And as usual in these cases, there are other unstated reasons that might actually be more important to the decision maker: >...Ford was also motivated by a desire to squeeze out his minority shareholders, especially the Dodge brothers, whom he suspected (correctly) of using their Ford dividends to build a rival car company. By cutting off their dividends, Ford hoped to starve the Dodges of capital to fuel their growth
- al_borland 1y ago
  Having people who make enough money to buy stuff is in the best financial interest of all companies in the long term. Companies and investors need to think further than 90 days ahead.
deleted 1y ago
[deleted]
charlie0 1y ago
It's time to become a CEO.
baron816 1y ago
Employee to CEO pay ratio is such a meaningless and distracting measure. Imagine there is a hedge fund that has only a handful of very highly paid employees. Compare that to a very large multi-national corporation that employs hundreds of thousands of low skilled laborers (something like Walmart). Let’s also imagine the CEOs of both companies have identical pay packages. All else being equal, the hedge fund that only employs a few people is much better for society than the company employing many many more people. I don’t think anyone here would agree with that. One thing we absolutely don’t want to do is disincentivize companies hiring people at the lowest end of the socioeconomic ladder. If employing those people lowers how much executives are allowed to get paid, what do you think is going to happen?
- WorkerBee28474 1y ago
  Yes. If companies are told to minimize CEO-to-employee pay they will just externalize the lowest paid employees. This won't meaningfully improve those employees lives or wages, but will reduce the target ratio, and may make promotions more difficult as the employee would need to move between legal entities.
- whatshisface 1y ago
  The statistic in the article compares average CEO pay to the median income, which is not driven by company-to-company differences in category of labor.
  - SideQuark 1y ago
    > The statistic in the article compares average CEO pay to the median income No, it compares the top 500 CEO pay out of 250k+ CEOs to all workers, which is as ludicrous and misleading as comparing the top 500 worker pay to all 250k CEOs and thinking this is the useful metric to rage about.
- fwip 1y ago
  Isn't this just an argument about Goodhart's law? (Yes, if this measure becomes a target, it will no longer be a useful measure.)
jstummbillig 1y ago
The pay gap is a such a sad metric. I understand where it's coming from (a mix of envy and sense of unfairness) but I think it's just not the right number to look at if we aim to increase prosperity. Much more interesting, if we cared about the prosperity of people, is the average inflation adjusted compensation of a companies employees, and that is something we could measure CEOs by.
declan_roberts 1y ago
Both blue collar and white collar wages are being dramatically depressed via legal and illegal immigration. I have no idea why this became a right-wing talking point. This is why big business is very pro immigration. Your employer can at any time replace you with an H1b who MUST work at the company to even stay in the country. As soon as we can reform immigration we are going to see much higher software salaries.
- aaronbaugher 1y ago
  The immigration issue has been a crown lying in the gutter waiting for someone to pick it up ever since the 90s when the Clinton "It's the economy, stupid" Democrats teamed up with the Bush neocon Republicans to make corporate profits and Wall Street numbers their driving basis for economic policy. All the approved economists said making goods cheaper would make everyone richer, no matter how it happened, so they yelled "Smoot-Hawley hur hur" at everyone who disagreed, and invited the world.
  - declan_roberts 1y ago
    It's unnecessarily politicized and also the source of all of these fake job postings. Employers put them up and everybody wastes their time applying. When the employer "can't find anyone qualified" they import an h1b for less money who can be worked harder because they have no choice. They love that they can hire and train people who can't complain or even legally leave to join a competitor. Pound sand, Americans!
SideQuark 1y ago
There are 211,230 CEOs with mean annual wage $258,900 [1]. Being the mean surely gives that the median is much lower. There are 120,053,000 age workers with median weekly income of $1,159 = $60,258 annual income [2] (and this includes part time, people in college, semi-retired, many people who have had high incomes in the past or will in the future). A story about a 4.3x of CEO to worker pay, which is the actual stats of CEO to worker, doesn't generate enough outrage. Comparing the top 500 (ish) of them to all workers is simply bad analysis designed to rile up people. Surely people here would call out the dishonesty of comparing the top 500 wage worker salaries (many millions/year each) vs all the CEOs (258k) as dishonest. It's funny seeing how many people eat this equally dishonest comparison up as indicative of all CEOs and companies... As to all the theories as to this or that law being some culprit, or some evil intentions, note the pay of the top performers in nearly every category, from musician, to athlete, to lawyer, to top 500 CEO, to even employee, have seen pretty much the same growth over the same time. It's nearly impossible all these are driven by something as specific as a labor law, a union change, a stock market or money format change. It's almost a certainty these are all driven by an excess of accrued capital in the US (and other markets) allowing those paying these incomes to pay for what they see as talent, whether is a huge rise in middle class disposable income, a larger share of US money available for retirement accounts, etc. Many years ago chasing down this exact set of ideas revealed a ton of econ papers reaching the same conclusions.... In short, high (someone else) pay rarely is money taken from the poor, and in more cases the poor and middle get higher wages as the top get higher wages simply by econ effects like the Baumol effect. This is the effect that as some jobs pay more, it attracts more people, so for society to get older jobs done, they must now also pay more, even if productivity in the latter jobs have not increased. It's why the lowest labor in the US pays many, many fold over what you'd get for the same output in most of the world. https://en.wikipedia.org/wiki/Baumol_effect https://en.wikipedia.org/wiki/Baumol_effect Just some thoughts.... [1] https://www.bls.gov/oes/2023/may/oes111011.htm https://www.bls.gov/oes/2023/may/oes111011.htm [2] https://www.bls.gov/cps/cpsaat39.htm https://www.bls.gov/cps/cpsaat39.htm
- cycomanic 1y ago
  Note that this is mean wage not compensation, specifically it does not include stock bonuses [1]. Considering that the high CEO compensation is almost exclusively based on equity (there are several famous cases of CEOs taking only $1 of wage), arguments based on wage are pretty meaningless. Also, I highly suspect that even if we take the ratio of top 1% CEOs compared to top 1% of non-executive employees the picture would not change dramatically (unfortunately I can't find easily accessible information). [1] https://www.bls.gov/oes/oes_ques.htm https://www.bls.gov/oes/oes_ques.htm
absolutdis 1y ago
[flagged]
SirMaster 1y ago
I mean there are only so many CEO positions available... Wouldn't we expect that the competition for so few top ranking positions would come with high pay?
msgodel 1y ago
It's weird to see complaints about this here when it's almost as easy to apply for a CEO position as an IC one on this site.
red-iron-pine 1y ago
we have officially arrived at the cyberpunk dystopia

152 points by e12e 1y ago

Every CEO I’ve worked for could have been replaced with a bot that randomly spat out “yes” or “no” to questions and the company would have either been improved or stayed the same.

mc32 1y ago

And it’s not only a problem at for profit organizations but also a problem for so-called NGOs and other non-profits —who you’d think would be different… Screw it, tax them progressively for every multiplier above the average Jack and Jill’s pay —with adjustments for company size and whatnot.

Hikikomori 1y ago
At some point do we need to make it a law to not compensate anyone more than x times the lowest worker salary?
- ndrwdvvs 1y ago
  this would greatly diminish meta's ability to hire ai researchers
  - Analemma_ 1y ago
    I'm already sold, you don't need to sweeten the deal further.
  - michaelt 1y ago
    Their competitors like Google and OpenAI would also be subject to the same salary cap.
- navbaker 1y ago
  That will never happen in the US as long as the current iteration of the Republican Party has any power to stop it, which is given to them by people continuing to vote against their own interests and thinking that billionaires are what “makes America great”.
  - m00x 1y ago
    The democrats are just as guilty of this. There was bi-partisan support for blocking congress from trading due to clear insider trading and the Democrats refused to support the bill. Democrats were also the ones to move all manufacturing to China, which hurt the American worker more than anything we've done in the past 20 years. If the democrats were actually serious about the working class, they would've let Bernie compete against Trump.
wat10000 1y ago
Never mind the multiplier. Bring back 90% marginal tax rates.
- bpt3 1y ago
  The ones that had numerous loopholes causing the effective rate to be similar to what it is today? Sure, have at it, but it's not going to have the effect you want. If you think anyone is going to pay an effective tax rate of 90%, I'm not sure what to tell you.
  - wat10000 1y ago
    Of course they're not. In a progressive system that uses marginal rates, there's little point in giving someone a raise when they're in the 90% bracket, so nobody is going to be paying a 90% effective rate on all their income. The point isn't to actually collect $90 million in taxes from a CEO paid $100 million, the point is to discourage that kind of ridiculous pay package in the first place.
    - _DeadFred_ 1y ago
      Also the 90% was only charged on income OVER a fairly high amount. I think it was the equivalent of income over $2 million.
    - bpt3 1y ago
      In reality, the people who earn that much will do what it takes to avoid those taxes, including moving themselves or their business to someplace that won't confiscate their income if needed.
      - wat10000 1y ago
        Somehow I don’t think Starbucks is going to move overseas. Anyway, most CEOs don’t own a majority share in their company. I’d like to see a CEO try to argue for a massive transformation of the company just so they can personally be paid more. Shareholders should boot them out pretty fast.

vaneri2007 1y ago

Are we back to monarchy where the few makes the most and the rest is there to watch?

goatlover 1y ago
Technofeudalism where our tech lords rent out all the services we rely on. AI will only make it worse.
- glitchc 1y ago
  Why not stop renting? As experts, we are in a unique position to be able to make that choice. Regular joes and janes don't have much hope, but we do.
  - hunter-gatherer 1y ago
    You must not be from around here. Most of us here on HN are lords, vassals, or nobles in this technofeudalist society. The technomonarch is currently giving us enough fiefs to behave appropriately.
    - bee_rider 1y ago
      I’m not sure of that. I expect most of the posters here are more like the equivalent of a skilled blacksmith. I mean, it is a little weird because compensation these days usually includes stock, so, some ownership of the company. But not much real decision making power beyond the limited-scope decisions around we implement their will. Maybe a consultant could be considered like a vassal?
      - glitchc 1y ago
        I think this is the right analogy. A skilled blacksmith has influence in his village, but he is still operating at the mercy of his vassal lord, and by extension, the king of the lands. Speaking up against either would find him dispossessed rather quickly.

humblebeekeeper 1y ago

Workers should exercise their power more, imo. We need more folks willing to put tools down, collectively, over stuff like: * RTO mandates that reduce productivity AND job satisfaction * High CEO pay outstripping worker pay * Loss of work autonomy and space (working without an assigned desk) * Layoffs out of the blue for successful teams * Weakening benefits * AI being wedged into whatever task you are working on I don't care if it's a union, I don't care if it's a guild, I don't care if it's just a group of folks deciding to take action together, whatever. It's time we (especially us in tech) to stop acting like "got mine" and start acting like "get ours".

taraindara 1y ago
The hard part is these workers are doing the job to survive life. Without the job, the unsure future is terrifying. I’m all for taking action. I just don’t know what action best suits my needs, other than finding a new job or starting my own business and hoping I don’t become one of the greedy ones too.
- echelon 1y ago
  > The hard part is these workers are doing the job to survive life. Tech companies used to hire all the brilliant engineers because they were worried about startups eating their lunch. Without antitrust enforcement, they've grown large enough that they can essentially bleed money in any of their non-core markets for decades without it impacting them. So this clearly isn't the case anymore. We need to: (1) get the DOJ/FTC/EU/ASEAN/etc. to slap the FAANG / Mag 7 hard. Bust them up into many companies. It would probably even result in greater market value being created as these companies are inefficiently sitting on gold mountains that they do not monetize and also making insane malinvestments that simply waste millennia of human engineering in stupid ways that have absolutely no potential of succeeding. But more than anything, this oxygenates the field for competition and provides greater upside to the financial / labor / innovation capital that are actually doing the work. (2) start lots of startups that erode the key money makers of these companies. They're quite vulnerable right now. And they've laid off a lot of highly skilled labor. Google should be four or five companies, at minimum. And it's time that the governments of the world demand it.

fredfoobar 1y ago

Looks like a cash grab before the AI meltdown

Workaccount2 1y ago

The media would probably lose 20% of their revenue if people learned that CEO's with those monster pay packages get paid out of shareholders pockets, whereas workers get paid out of company pockets. To put it plainly - not paying the CEO wouldn't free up any meaningful amount of more money to pay the workers.

vouaobrasil 1y ago
Even if that were true, they should still get less on principle. Making the elite richer gives them even more power that they don't need.
- bpt3 1y ago
  On what principle? Why should anyone be barred from negotiating the best deal they can get in a fair exchange?
  - vouaobrasil 1y ago
    The keyword is fair. The have the power to influence the government through bribes so it's never fair. And they can use their wealth to take advantage of the commons as well. They should be sent to prison, the majority of them.
    - bpt3 1y ago
      All that matters here is that the CEO and company are negotiating without one side being able to apply some sort of external pressure to force the other to capitulate to their demands. Unless of course you're claiming that CEOs are bribing "the government" to force companies to increase their pay, which would be quite the theory. So again, what is the principle that says CEOs should be paid less than a company is willing to pay them to work in that role? Should all workers decline to maximize their compensation, or just those you deem to have too much money? If the latter, what is the threshold?
clipsy 1y ago

reliabilityguy 1y ago

I suspect that lack of strong antitrust contributed greatly to what we have now.

vouaobrasil 1y ago
That, and the government support of big business in many other ways as well.
paulddraper 1y ago
What trusts do you see? Apple?
- reliabilityguy 1y ago
  Google, Meta, MSFT, Apple, and many many others. My (perhaps moronic, but hey, I’m not an expert) metric is this: if a company X constantly buys other companies just for the sake of preventing competition —- it’s bad, and we risk to have a monopoly. Which, we almost do have with Google, Apple, and many others. I mean, it’s a fine line to thread: companies should be able to do M&As, but at the same time, they should not be allowed to become monopolies.
  - adastra22 1y ago
    > Google, Meta, MSFT, Apple, and many many others. That's ... not how monopolies work.
    - reliabilityguy 1y ago
      Thank you for a very insightful comment. PS you do not have to have a monopoly to get no or minimal competition.
    - arrosenberg 1y ago
      Antitrust law covers a broad range of anti-competitive corporate behavior. Don't be pedantic.
- 1y ago

bko 1y ago

The question is often framed as "fairness" but the more interesting question, are the high salaries worth it? One person they cite as a high salary is the Starbucks CEO. > The report listed Starbucks CEO Brian Niccol as making 6,666 times more than the company’s typical worker, the largest pay gap in the S&P 500. (Niccol took over the company’s helm last September. The AFL-CIO annualized his compensation, listing it as nearly $98 million, compared to the typical Starbucks worker’s pay of less than $15,000.) But what happened after he was announced? The stock jumped nearly 25%, resulting in an increase market cap of 27.2 billion [0]. So the $98m per year compensation is a great bargain for Starbucks and all their shareholders. This at least suggests that CEOs are very important (or investors are stupid?). But the stock price today is about the same level post announcement, so the value of his leadership mostly matched expectations for now. It would be great if the article had some of this context and nuance rather than a press release from the AFL-CIO. https://www.forbes.com/sites/petercohan/2024/08/13/why-starbucks-stock-could-more-than-double-under-new-ceo/ https://www.forbes.com/sites/petercohan/2024/08/13/why-starb...

dvt 1y ago
> So the $98m per year compensation is a great bargain for Starbucks and all their shareholders. And their employees, too, actually, since they have something called the Bean Stock[1] program. But citing this wouldn't fit the article's narrative. Comparing salaries of a regular employee and a CEO (especially one of a public company) is like comparing apples to oranges; it has nothing to do with fairness. The two are fundamentally different in effort, incentive, and risk:reward structure. [1] https://www.starbucksbenefits.com/en-us/home/stock-savings/bean-stock/ https://www.starbucksbenefits.com/en-us/home/stock-savings/b...
- buerkle 1y ago
  Sorry but the risk:reward narrative is tiring. Many of these CEOs walk away with millions whether they succeed or fail, there's little to no risk for them. In fact, even they fail in cases they end finding another well paying executive position. Meanwhile, many of their employees are living paycheck to paycheck.

tschellenbach 1y ago

AI is giving people endless freedom to start their own companies if they feel their skills are undervalued elsewhere. Very positive change for the world I think.

rimbo789 1y ago
What a wildly naive take. AI will be another force of centralization, de-skilling, and repression that will make more people more dependant and more precarious making it much harder for them to start any form of business

shkkmo 1y ago

The edited headline "Employee – CEO pay gap historically wide" here is wrong. The Employee - CEO gap is higher (ratio 295) than last year (ratio 268) but lower than in 2021 (ratio 324). If you're gonna make up a headline, don't make up one that is factually false.

e12e 1y ago
Sorry about that - I tried to shrink the original to fit hn, but gave up after a few attempts. I'd argue the gap is still atypically wide, these past few years, though.
- shkkmo 1y ago
  The gap is atypically wide, perhaps "Employee – CEO pay gap rises" would have the same intent without the factual inaccuracy?

thrance 1y ago

Boss makes a dollar, I make the third of a cent.

Kapura 1y ago

damn, if only it were possible to pass laws that make rewarding individuals increasingly unattractive as the individual rewards increased. some sort of progressive taxation scheme, perhaps. if only such a thing could exist!

m00x 1y ago
You can't reap the rewards from a highly free market country while also interfering with the free market. There are countries where that gap is lower where you can move to if you really care about this. Most of Europe is a lot more equal, but you'll take a significant pay cut.
- hollywood_court 1y ago
  We do plenty of interfering with the free market. We just don't do it in ways that benefit the workers.
- greedo 1y ago
  There's no such thing as a free market.
- standardUser 1y ago
  Binary thinking like that is a rhetorical trick, and a lazy one, that ignores both the diversity of existing market-oriented nations and the reality that these systems are not static. Not to mention that the American system is one of constant, frequent, and oftentimes contradictory forms of market interference, even if the manner of interference differs a bit from Western norms.
- tartoran 1y ago
  > You can't reap the rewards from a highly free market country while also interfering with the free market. Look deeper into who's reaping all the benefits and who's interefering with the market.
- mattmanser 1y ago
  Those rewards are failing, so yes you can. Your argument is just trickle down economics dressed up. But worse, we know that doesn't work. Not, we think. WE KNOW IT DOESN'T WORK. In fact, once you realize it's just the same tired trickle down economics argument, then when you start asking why is growth stalling, why are living standards falling? You can easily answer it. Because trickle down economics don't work. Because too much value is being captured by a tiny minority, who use that capital poorly.

cyanydeez 1y ago

Wonder if they included the acquahires ditching the dead weight

Jerry2 1y ago

I'm convinvinced that CEO-employee wage gap is due to this not-so-well known legal case from 1919: Dodge v. Ford Motor Co. [1] Basically, in 1919, Henry Ford sought to reinvest the Ford Motor Company’s profits into raising employee wages and expanding hiring, arguing that sharing success with workers would strengthen the economy and the company’s long-term prospects. However, minority shareholders John and Horace Dodge (who also ran their own competing auto company) sued Ford, claiming that his actions violated the fiduciary duty to maximize profits for shareholders. The Michigan Supreme Court ruled in favor of the Dodges, declaring that a corporation’s primary obligation was to serve the financial interests of its shareholders and not broader social goals or even the well-being of its employees. This decision established a legal precedent that continues to shape corporate law even today and reinforcing the doctrine of "shareholder primacy" and limiting the ability of companies to prioritize stakeholders (like workers or communities) over investor returns. It's been downhill for employees since. [1] https://en.wikipedia.org/wiki/Dodge_v._Ford_Motor_Co https://en.wikipedia.org/wiki/Dodge_v._Ford_Motor_Co.

deleted 1y ago
[deleted]
opo 1y ago
>Basically, in 1919, Henry Ford sought to reinvest the Ford Motor Company’s profits into raising employee wages I don't actually see any reference in the wikipedia article that Ford was saying he wanted to use the dividend money to raise wages: >...Henry Ford, sought to end special dividends for shareholders in favor of massive investments in new plants that would enable Ford to dramatically increase production, and the number of people employed at his plants, while continuing to cut the costs and prices of his cars. And as usual in these cases, there are other unstated reasons that might actually be more important to the decision maker: >...Ford was also motivated by a desire to squeeze out his minority shareholders, especially the Dodge brothers, whom he suspected (correctly) of using their Ford dividends to build a rival car company. By cutting off their dividends, Ford hoped to starve the Dodges of capital to fuel their growth
al_borland 1y ago
Having people who make enough money to buy stuff is in the best financial interest of all companies in the long term. Companies and investors need to think further than 90 days ahead.

deleted 1y ago

[deleted]

charlie0 1y ago

It's time to become a CEO.

baron816 1y ago

Employee to CEO pay ratio is such a meaningless and distracting measure. Imagine there is a hedge fund that has only a handful of very highly paid employees. Compare that to a very large multi-national corporation that employs hundreds of thousands of low skilled laborers (something like Walmart). Let’s also imagine the CEOs of both companies have identical pay packages. All else being equal, the hedge fund that only employs a few people is much better for society than the company employing many many more people. I don’t think anyone here would agree with that. One thing we absolutely don’t want to do is disincentivize companies hiring people at the lowest end of the socioeconomic ladder. If employing those people lowers how much executives are allowed to get paid, what do you think is going to happen?

WorkerBee28474 1y ago
Yes. If companies are told to minimize CEO-to-employee pay they will just externalize the lowest paid employees. This won't meaningfully improve those employees lives or wages, but will reduce the target ratio, and may make promotions more difficult as the employee would need to move between legal entities.
whatshisface 1y ago
The statistic in the article compares average CEO pay to the median income, which is not driven by company-to-company differences in category of labor.
- SideQuark 1y ago
  > The statistic in the article compares average CEO pay to the median income No, it compares the top 500 CEO pay out of 250k+ CEOs to all workers, which is as ludicrous and misleading as comparing the top 500 worker pay to all 250k CEOs and thinking this is the useful metric to rage about.
fwip 1y ago
Isn't this just an argument about Goodhart's law? (Yes, if this measure becomes a target, it will no longer be a useful measure.)

jstummbillig 1y ago

The pay gap is a such a sad metric. I understand where it's coming from (a mix of envy and sense of unfairness) but I think it's just not the right number to look at if we aim to increase prosperity. Much more interesting, if we cared about the prosperity of people, is the average inflation adjusted compensation of a companies employees, and that is something we could measure CEOs by.

declan_roberts 1y ago

Both blue collar and white collar wages are being dramatically depressed via legal and illegal immigration. I have no idea why this became a right-wing talking point. This is why big business is very pro immigration. Your employer can at any time replace you with an H1b who MUST work at the company to even stay in the country. As soon as we can reform immigration we are going to see much higher software salaries.

aaronbaugher 1y ago
The immigration issue has been a crown lying in the gutter waiting for someone to pick it up ever since the 90s when the Clinton "It's the economy, stupid" Democrats teamed up with the Bush neocon Republicans to make corporate profits and Wall Street numbers their driving basis for economic policy. All the approved economists said making goods cheaper would make everyone richer, no matter how it happened, so they yelled "Smoot-Hawley hur hur" at everyone who disagreed, and invited the world.
- declan_roberts 1y ago
  It's unnecessarily politicized and also the source of all of these fake job postings. Employers put them up and everybody wastes their time applying. When the employer "can't find anyone qualified" they import an h1b for less money who can be worked harder because they have no choice. They love that they can hire and train people who can't complain or even legally leave to join a competitor. Pound sand, Americans!

SideQuark 1y ago

There are 211,230 CEOs with mean annual wage $258,900 [1]. Being the mean surely gives that the median is much lower. There are 120,053,000 age workers with median weekly income of $1,159 = $60,258 annual income [2] (and this includes part time, people in college, semi-retired, many people who have had high incomes in the past or will in the future). A story about a 4.3x of CEO to worker pay, which is the actual stats of CEO to worker, doesn't generate enough outrage. Comparing the top 500 (ish) of them to all workers is simply bad analysis designed to rile up people. Surely people here would call out the dishonesty of comparing the top 500 wage worker salaries (many millions/year each) vs all the CEOs (258k) as dishonest. It's funny seeing how many people eat this equally dishonest comparison up as indicative of all CEOs and companies... As to all the theories as to this or that law being some culprit, or some evil intentions, note the pay of the top performers in nearly every category, from musician, to athlete, to lawyer, to top 500 CEO, to even employee, have seen pretty much the same growth over the same time. It's nearly impossible all these are driven by something as specific as a labor law, a union change, a stock market or money format change. It's almost a certainty these are all driven by an excess of accrued capital in the US (and other markets) allowing those paying these incomes to pay for what they see as talent, whether is a huge rise in middle class disposable income, a larger share of US money available for retirement accounts, etc. Many years ago chasing down this exact set of ideas revealed a ton of econ papers reaching the same conclusions.... In short, high (someone else) pay rarely is money taken from the poor, and in more cases the poor and middle get higher wages as the top get higher wages simply by econ effects like the Baumol effect. This is the effect that as some jobs pay more, it attracts more people, so for society to get older jobs done, they must now also pay more, even if productivity in the latter jobs have not increased. It's why the lowest labor in the US pays many, many fold over what you'd get for the same output in most of the world. https://en.wikipedia.org/wiki/Baumol_effect https://en.wikipedia.org/wiki/Baumol_effect Just some thoughts.... [1] https://www.bls.gov/oes/2023/may/oes111011.htm https://www.bls.gov/oes/2023/may/oes111011.htm [2] https://www.bls.gov/cps/cpsaat39.htm https://www.bls.gov/cps/cpsaat39.htm

cycomanic 1y ago
Note that this is mean wage not compensation, specifically it does not include stock bonuses [1]. Considering that the high CEO compensation is almost exclusively based on equity (there are several famous cases of CEOs taking only $1 of wage), arguments based on wage are pretty meaningless. Also, I highly suspect that even if we take the ratio of top 1% CEOs compared to top 1% of non-executive employees the picture would not change dramatically (unfortunately I can't find easily accessible information). [1] https://www.bls.gov/oes/oes_ques.htm https://www.bls.gov/oes/oes_ques.htm

absolutdis 1y ago

[flagged]

SirMaster 1y ago

I mean there are only so many CEO positions available... Wouldn't we expect that the competition for so few top ranking positions would come with high pay?

msgodel 1y ago

It's weird to see complaints about this here when it's almost as easy to apply for a CEO position as an IC one on this site.

red-iron-pine 1y ago

we have officially arrived at the cyberpunk dystopia